Eruption feels imminent – ​​ING

After rebounding from yesterday’s initial US damage data, EUR/USD has bounced back below recent highs of 1.1180, notes Chris Turner, FX strategist at ING.

EUR/USD may trade in the 1.1150-1.1200 range today

“We’ve mentioned this before, but EUR/USD appears to be on the verge of breaking out of a low volatility range. For example, a weekly close above 1.1160 (the upper twenty-month Bollinger band) warns of a sizeable breakout to the upside. At this stage of the US cycle, we believe a EUR/USD breakout is entirely possible.”

“There doesn’t appear to be an immediate catalyst for this upward breakout today, given the lack of US data and only second-tier releases from the Eurozone. Let’s expect a speech from Christine Lagarde today at 17CET.”

“The market still has 6bp from an October ECB rate cut – which should exit the market at some point. A range of 1.1150-1.1200 EUR/USD can be seen today, although we maintain an uptrend.”