EUR/USD will struggle to trade sustainably above 1.0600 – ING

EUR/USD continues to edge higher toward 1.0600. But in the view of economists at ING, a rally above 1.06 would be premature.

Rate expectations unlikely to move much in the coming days

“Markets are pricing in around 55 bps of tightening ahead of the ECB meeting next week, and with no more speakers before the rate announcement and no key data releases except for the ZEW surveys on Tuesday, we doubt that rate expectations will move much in the coming days.”

“Our base case is still that EUR/USD will struggle to trade sustainably above 1.0600, and is mostly facing downside risks into year-end as the Dollar could regain some ground on global risk uncertainty and rebounding energy prices.”