EUR/USD Rally Has Further To Run, But Dovish Repricing Needed
The EUR/USD exchange rate has seen a sharp rise in recent months, reaching a high of around 1.1547 in July after hitting a monthly low near 1.1354.
According to ING, the Euro remains supported around 1.1500 following the Dollar selloff, although a sustained move above 1.1600 would require a further dovish repricing of US interest rates.
The bank estimates that speculative long-Dollar exposure against other major currencies was at its most stretched since January 2025, while leveraged funds held their largest EUR/USD short positions since 2021.
ING believes the sharp change in Dollar momentum leaves the Euro better supported in the near term, with analysts noting that EUR/USD broke through 1.1500 'with little resistance' and expects the level to attract buyers for a while longer.