EUR/USD Eyes Year-End Target as Fed Tightening Prospects Dim

ING's Francesco Pesole maintains a constructive outlook on the Euro against the US Dollar, despite recent US data. He believes that the Federal Reserve is unlikely to deliver further tightening, creating an environment conducive to EUR/USD upside.

Pesole targets 1.1600 for the coming weeks, followed by 1.1700 in autumn and 1.1800 by year-end. However, he warns that a lack of clear catalysts and Gulf risks could keep the currency pair confined to tight ranges and low volatility.

The recent US data has led to a preference for EUR/USD upside, according to Pesole. This view is rooted in his assessment of the Federal Reserve's actions, but it must be balanced against the risk of renewed escalation in the Gulf, which could provide fresh support to the dollar.