ING: EUR/USD at 1.150 Is Premature, 1.130 More Realistic Near-Term

EUR: 1.150 is too soon – ING

The euro has been holding relatively firm against the US dollar in recent sessions, supported by broader G10 currency strength, particularly from the Swedish krona (SEK) and Swiss franc (CHF). However, analysts at ING suggest that a near-term move to 1.150 in EUR/USD is premature, favoring a more modest upside target of 1.130.

ING notes that recent strength in the SEK and CHF reflects market positioning toward USD alternatives and a hopeful outlook surrounding potential peace negotiations in the Ukraine-Russia conflict. While the euro could benefit from both themes, the Swiss franc may be vulnerable to a sharp correction if a ceasefire deal is reached, due to crowded long positioning.

On the domestic front, little has changed to drive the euro decisively higher. Upcoming comments from European Central Bank (ECB) officials, such as Chief Economist Philip Lane, are unlikely to shift the broader policy outlook. The ECB Governing Council has been relatively flexible with forward guidance, and markets continue to price in two rate cuts this year. That stability keeps short-term EUR swap rate volatility contained.

Looking ahead, ING believes any upside in EUR/USD will be capped by possible USD-positive developments emerging from the G7 summit in Canada. Trade headlines favorable to the US could support the dollar and stall the euro’s advance.

“The next important level is 1.150, but markets may be inclined to sustain such a level only with weaker US data and perhaps a more upbeat Russia-Ukraine narrative,” ING notes. “For now, it is a tad premature, and we like 1.130 as a short-term target.”

In summary, while the euro remains well-supported, ING does not expect a sustained break above 1.150 in the near term unless additional catalysts emerge.