EUR/USD keeps its recovery mode capped below 1.1300. Economists at ING believe that the world’s most popular currency pair could challenge the 1.1200 once again.

Limited upside potential

“It appears that the euro’s role as a funding currency is curbing the EUR/USD upside in the current market environment, as investors jump back into risk-on bets.”

“With the eurozone growth outlook already partly compromised by restrictions in Germany and other eurozone countries, and the European Central Bank sticking to a broadly dovish tone, the euro may be facing more pressure regardless of Omicron-related sentiment.”

“We could see EUR/USD re-test 1.1200 this week.”