EUR/USD is trading at the highest levels since early 2022, and CFTC data showed that pre-CPI positioning on EUR/USD was already quite stretched on the long side (+19% of open interest). We also estimate there is currently a 2% short-term risk premium built into EUR/USD, based on our financial fair value model which includes rates and equity factors.
We see some moderate risks of a correction in EUR/USD this week, possibly to the 1.1100/1.1150 area. A continuation of last week’s rally may start to face increasing resistance at the 1.1300/1.1350 area.
- ING FX Strategy
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