Economists at ING think that the European Central Bank (ECB) could disappoint the market’s hawkish expectations and send EUR/USD back to the 1.1200 support.

Downside risks from hawkish expectations

“We think that patience will prevail over panic in the ECB’s message when it comes to inflation, and given the bar for a hawkish surprise is placed quite high after this week’s consumer price index figures, we expect EUR/USD to give up some of its recent gains after the ECB announcement.”

“We expect the pair to pull back to the 1.1200 support, with any recovery in the dollar set to trigger a break below that level.”