EUR/USD to remain in a tight range – ING

Next week, the European Central Bank (ECB) will have its policy meeting. According to ING analysts, the meeting will be uneventful, unlikely to shake the EUR/USD tight range. They see the pair with a neutral bias for next week, trading in the 1.1060/1.1200 range. 

Key Quotes: 

“The European Central Bank meeting (Thursday) should be a non-event. No new economic projections are published and the board’s risk assessment is unlikely to change compared to the December outlook. While the ECB's strategic review is set to begin soon, it won't be completed until year-end and in the meantime, the narrative is unlikely to change. Hence, a fairly limited impact on the euro stemming from this meeting. As for the January eurozone PMI (Friday), our economists look for a modest improvement, though the Manufacturing PMI should remain in contractionary territory. Still, stabilising / modestly improving eurozone PMIs fit the current ECB outlook for stability and hopes for a rebound. This, in turn, underscores the fact that there is no need for an imminent change in the policy stance. With no ECB policy normalisation on the horizon any time soon, EUR upside appears to be off the table.”

“In the US, it is a fairly quiet day on the data front. December US Existing home sales (Wednesday) should not materially change the dollar's prospects. Rising speculation about possible US tax cuts might be seen as marginally positive for the US dollar vs the low-yielding euro, as it would benefit the dollar via (a) the improved growth channel, and (b) further reduce the odds of a Federal Reserve rate cut this year (which is still almost fully priced in).”

“As for next week, expect EUR/USD to remain in a tight range, as has been the case for the past few weeks.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

GBP/USD retreats from new highs amid dollar strength

GBP/USD has fallen off the peak of 1.3719, the highest since 2018, amid fresh dollar strength. Optimism about the UK's vaccine campaign and lower cases boosted sterling earlier. The greenback awaiting Biden's first moves as President. 


EUR/USD falls toward 1.21 ahead of Biden´s inauguration

EUR/USD has been descending toward 1.21. President-elect Biden is inaugurated later in the day and hopes of stimulus are high after Treasury Secretary nominee Yellen's testimony. 


Gold: Bulls recapture 200-DMA ahead of Biden's inauguration

Gold prices are attempting to correct higher above 200-DMA. The metal cheers rising US inflation expectations amid hopes of a massive stimulus package under the incoming Biden administration. 

Gold news

Bank of Canada Rate Decision Preview: No change anticipated in interest rate

The Bank of Canada is widely expected to keep monetary policy and quantitative easing unchanged at its meeting on Wednesday in spite of new COVID-19 provincial lockdowns and a slowing economy.

Read more

US Dollar Index: Upside target remains at 91.00

DXY met buyers in the 90.30 region earlier on Wednesday and now resumes the upside to the 90.50/55 band.

US Dollar Index News