Euro: Downside risks start to shrink against US Dollar – ING

EUR/USD: mildly bullish, but conditional. ING’s case is that the pair’s fall below 1.140 looks excessive relative to short-term fair value: rate differentials have shifted in the euro’s favor, and stronger eurozone PMI readings offered some support. That suggests scope for a partial rebound if the dollar-driven selling eases—but this is a valuation argument, not confirmation that the downtrend has reversed.

The near-term risk remains further downside: ING notes limited technical support before the June lows and says a widening of short-term rate differentials in the dollar’s favor could reopen the path to new lows. Traders should watch US rate expectations and yields against euro-area rates, as well as whether eurozone activity data continue to improve. The reported 1.1430–1.1450 area is ING’s fair-value estimate, not a guaranteed target.