EUR/USD tested 1.050 yesterday and then briefly rebounded before coming under pressure again around the 1.0580 area. Intraday volatility will likely be the norm for coming days due to a stretched long US Dollar (USD) positioning, but it is clear that the momentum on EUR/USD remains bearish and investors will remain attracted to selling the rallies, ING’s FX analyst Francesco Pesole notes.

EUR/USD to trade at 1.040 in the end of the year

“The minutes of the October European Central Bank minutes showed an ongoing debate about the disinflationary trend, and some hawkish members were reluctant to go for a rate cut that was described as a “risk management” move. There is a clear shift from inflation to growth concerns in the Governing Council, but no indications of a strong consensus for an acceleration in easing.”