EUR/USD has been moving lower with some momentum. The pair dropped to its lowest level since June 2020 at 1.1185 on Wednesday and clings to modest daily gains above 1.1200 on Thursday. Economists at ING expect the pair to pungle to the 1.10 level on a break below 1.1170.
“Temporary support seems to have been found around the 1.1200 area, but the only factor supporting it seems to be oversold technical readings. Presumably more selling interest would emerge were a correction to be seen to the 1.1280/1350 area.”
“Next support is at 1.1170 and below that we are not getting far from 1.10 at all. This looks the state of play into December when, in the early weeks, we will see if any slowing in the relentless demand for USD funding (for year-end balance sheet purposes) takes some upside pressure off the dollar.”
“Look out for a variety of ECB speakers today and also the release of the minutes to the 28 October ECB meeting. Despite the fourth wave in Europe, the ECB seems to be sticking to the view that the PEPP scheme will end in March.”
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