EUR/USD reversed its direction after declining toward 1.0950 on Tuesday and managed to close above 1.10 with small daily gains. Economists at ING still expect the pair to move downward to the 1.09 level in the coming sessions.

Policy and growth divergence put a cap around the 1.11 zone

“Policy divergence and growth divergence (the latter exacerbated by the war in Ukraine) are, in our view, putting a cap on any recovery in EUR/USD around the 1.11 area.”

“We still see a move to 1.09 in the next few days as more likely.”