Analysts at ING see the EUR/USD pair with a bullish tone for next week and expect it to trade in the 1.1075/1.1250 range. According to them, the Dollar may face more hurdles on the back of grim data and broadly supported risk appetite.
Key Quotes:
“The frequency of market-moving data releases is going to be much lower in the coming week. Only retail sales and German industrial production (both for September) are on the eurozone agenda while the ISM Non-Manufacturing and the University of Michigan sentiment index will be in the spotlight for the US. The ISM read will likely be pivotal as markets hope to cement their expectations that the Fed will stay put in December; a clear rebound in the gauge will be needed to dissipate fears that the slowdown in manufacturing has expanded to the service sector. Our economists see the risk of a weaker-than-expected read that may revive some expectations for a December cut (with the latest ISM manufacturing indicating a recession in the sector and keeping the case for a cut in place).”
“Markets will also await more details on trade talks and on President Trump’s impeachment process. The latter may continue to have a quite limited market impact, whereas a number of sticky points (as well as a timetable, after the APEC meeting got cancelled) are still to be outlined in the “phase-one” US-China trade deal. We still see the risk of markets having misplaced their optimism for a breakthrough in trade tensions, although we expect the news flow on trade to remain broadly supportive for risk sentiment this week. All this may translate into another unlucky weak for the dollar and give another chance for EUR/USD to crawl back above 1.12.”
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