Respite today, more pressure later? – ING

Markets keep a moderate bearish bias on EUR/USD in the near term, even if their baseline expectation for a tick higher in US unemployment should offer a respite today, ING’s FX strategist Francesco Pesole notes.

A break below 1.1000 can drive EUR towards 1.09 relatively quickly

“Ultimately, the less supportive rate differentials, risk sentiment instability and a turbulent EU budget season mean EUR/USD could stay under pressure. 1.1000 is a big support, so a break lower could mean the correction extends to 1.09 relatively quickly.”

“The eurozone calendar doesn’t include market-moving data today, but there are quite a few European Central Bank speakers to watch. After the relatively dovish tone by Isabel Schnabel earlier this week, we can reasonably expect other hawks to give in to dovish pressure and no longer push back against an October cut.”