EUR/USD could reach the 1.0650/70 area over the coming days – ING

EUR/USD stays in a consolidation phase slightly below 1.06 early Friday. Economists at ING expect the world’s most popular currency pair to advance towards the 1.0650/70 area in the next few days.

EUR/USD seen getting close to parity in 3Q22

“The market now prices a 31/32bp ECB rate hike at the 21 July ECB meeting – pricing which has plenty of scope to bounce between +25bp and +50bp over the next two months. This could drag EUR/USD back to the 1.0650/70 area over the coming days – helped by brief periods of calm in the external environment – but we would see this as a bear market bounce.” 

“Our core EUR/USD view for 2H22 is one of heightened volatility and probably EUR/USD getting close to parity in 3Q22 when expectations of the Fed tightening cycle could be at their zenith.”