EUR/USD Stuck in Mid-Range as ECB Hike Looms
EUR/USD is currently trading near its mid-range price of around $1.1600, according to ING's Chris Turner. This means that the pair has been fluctuating within this range since April, with no significant upward momentum.
The Eurozone calendar is quiet today, which is why ING does not see a strong justification for the pair to break above resistance at $1.1640/45. In fact, they expect a dovish hike from the ECB that fails to validate additional tightening priced in by markets, which could weigh on the euro.
ING also notes that the decline in the euro's terms of trade has not had a significant impact on EUR/USD so far, despite expectations that it would. However, they believe this is an important factor that should be considered, and its absence is likely to raise questions about the dollar's strength.