Support at 1.1050 to remain under pressure heading into FOMC meeting – ING

On Monday, EUR/USD broke below 1.1100. Economists at ING analyze the pair’s outlook.

Pro-growth China news may be the only factor holding EUR/USD above 1.1050 

We still see some downside risks to EUR/USD from the Dollar side later this week.

Expect support at 1.1050 to remain under pressure heading into tomorrow’s FOMC meeting and a break under 1.10 would of course undo the positive momentum witnessed earlier this month. 

It is possible we see a very narrow range in EUR/USD today, something like 1.1050-1.1100, where the pro-growth China news may be the only factor holding EUR/USD above 1.1050.

Bigger picture, we may have to wait until September for the more sustainable upside breakout in EUR/USD, when the Fed will have sufficient evidence of disinflation to formally acknowledge it in an FOMC statement.