EUR/USD Holds 1.130 Anchor Amid Positive EU-US Trade News – ING

EUR/USD Holds Key 1.130 Support Level Amid Positive EU-US Trade Developments

The euro has performed better than most G10 currencies recently, buoyed by encouraging news regarding trade negotiations between the European Union and the United States. According to ING, the 1.130 level remains a strong support for the EUR/USD currency pair.

Despite some recent concerns over inflation in France showing a negative month-on-month CPI print in May, which may indicate an initial deflationary impact from tariffs on the EU, ING believes the euro is well anchored at 1.130. If upcoming inflation data from other EU member states follow a similar trend, markets might start pricing in a higher chance of European Central Bank (ECB) interest rates falling below 1.75%.

However, ING notes that the EUR/USD has repeatedly found support around 1.130 over the past six weeks, suggesting this level will continue to act as a floor for the pair. Furthermore, if positive surprises in US economic data and trade developments continue, a break below 1.130 could occur, but it is unlikely that markets will fully discount the US dollar risk premium given recent concerns about the US deficit.

Overall, ING sees the 1.130 level as an anchor point for EUR/USD, with upside risks expected to dominate the currency’s movement in the coming weeks.