EUR/USD: Risks to a big break below 1.10 are building – ING

EUR/USD continues to trade near the lows and remains vulnerable. Economists at ING note that the pair is at risk of breaking below the 1.10 level.

Remaining vulnerable

“Eurozone CPI surprised to the upside at 5.8% YoY, but unlike the Fed the ECB has more cause to mark this down as supply-driven inflation. The war's impact on Eurozone growth could be anywhere in the 0.3-1.0% region and the ECB will be treading very carefully when it comes to tightening policy.”

“We had been preferring a broad 1.10-1.15 range in EUR/USD this year - after the hawkish turn from the ECB – but the FX options market is warning that the risks to a big break below 1.10 are building.”