EUR/USD: Shallow consolidation now before the assault comes on parity – ING

EUR/USD is attempting to extend its recovery above 1.02. Economists at ING expect the pair to consolidate before sliding below parity. 

Parity within striking distance

“We would continue to back Fed tightening holding up better in this summer's equity bear market and there are no signs yet of a significant floor in EUR/USD.”

“Expect shallow consolidation now – likely to be capped by a maximum 1.0350/70, or more likely 1.0270 – before the assault comes on parity. Tomorrow's NFP or next week's US CPI look the best candidates to trigger the test of parity.” 

“We can expect the ECB to threaten more aggressive rate hikes, e.g. 50 bps at the July meeting, but given the global and European growth environment, hawkish rhetoric looks unlikely to deliver much of a euro bounce.”