EUR/USD experienced an uplift from the 1.0800 level on Tuesday, prompting analysts at ING to assess the pair’s future trajectory.
Key Observations:
- The release of soft January Consumer Price Index (CPI) data from Germany and France is anticipated.
- Base effects could contribute to lower CPI figures, potentially heightening concerns about a European Central Bank (ECB) rate cut in April.
- Although an ECB rate cut in April is not the primary view, the possibility remains open, which may result in EUR/USD concluding the week with a softer stance heading into Friday’s US jobs data.
ING’s Outlook:
- The baseline outlook leans towards EUR/USD testing the lower boundaries of the 1.0800-1.0875 range leading up to the Federal Open Market Committee (FOMC) meeting.