Analysts at ING, consider the EUR/USD pair could break above 1.1200 over the next days, but they point out it should find resistance around 1.1250.
Key Quotes:
“The positive spill-over effect of UK election into EUR/USD seem to have worn off. As we head to the Christmas holidays, the week ahead presents a few interesting events and releases. In the eurozone, the PMIs are published today and in line with consensus we’re expecting another tick-up in the manufacturing numbers. However, our economists see the risk of a weaker services reading, which may partly offset the positive market impact. The IFO Institute indicators are also expected to inch higher. However, the grim economic outlook for the Common Area and the prospects of lower yields for longer suggests that data surprises are bound to still have limited positive impact on the euro.”
“In the US, the calendar is filled with a number of surveys (PMI, Philadelphia Fed, Empire manufacturing) and the industrial production numbers for November will be watched too as many expect a fierce rebound. Housing numbers should find support from a decline in mortgage rates and personal spending is also seen to be holding up well. All in all, some broadly constructive data flow, paired with the well-supported rates (thanks to the US-China trade deal), suggest we’ll likely lack some evident catalysts for dollar weakness next week. Nonetheless, expect EUR/USD to keep broadly having limited upside potential due to the euro’s attractiveness as a funding currency in the supported risk environment. The pair may break 1.1200 but should find resistance around 1.1250 (August highs).”
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