ING expects the euro to drift toward 1.1380 before reacting to the European Central Bank’s policy decision tomorrow.
EUR/USD has remained resilient despite rising energy prices, with natural gas retesting March highs of EUR60/MWh. Interest rate differentials and expectations of a more aggressive ECB tightening cycle compared to the Fed have supported the pair.
Analysts note that while the euro has outperformed, further upside may be limited. Markets are already pricing in elevated ECB rate hikes, and tomorrow’s meeting may not deliver additional hawkish surprises. ING forecasts a drift toward 1.1380 before the decision.
The pair’s next move hinges on the ECB’s language and guidance, though significant shifts in rate expectations appear unlikely.