The euro could climb to 1.1600 against the US dollar following softer-than-expected inflation data from the Eurozone, according to ING analyst Francesco Pesole. With major Eurozone economic releases now complete and ECB officials maintaining a relatively quiet stance, EUR/USD price action is increasingly dictated by US-side developments rather than European factors.
The shift in drivers means traders should focus on upcoming US economic indicators and Federal Reserve communications as primary catalysts for the currency pair. Weaker Eurozone CPI typically would pressure the euro lower by reducing rate hike expectations, but the current dynamic suggests dollar weakness could override this traditional relationship. The 1.1600 level represents a significant technical target that would mark notable euro strength from current levels.
Market participants trading euro-dollar should prepare for increased volatility tied to US data releases rather than European events in the near term.
FXnCO Insight
EUR/USD traders should pivot focus entirely to US economic calendar and Fed speakers, as Eurozone factors take a back seat in driving the pair toward potential 1.1600 resistance.
Source: FXStreet