EUR/USD is re-testing the 1.07 support. The contrast with a worsening growth picture in Europe may send EUR/USD back to 1.05 in June, in the opinion of economists at ING.

Euro struggles to find any solid bullish driver at the moment

“The past few days seem to have conveyed the message that the Fed’s tightening cycle is based on a sturdier growth story than Europe's and the speculation around a September Fed pause is being kept at bay for now. Ultimately, we think all this is laying the basis for a period of gradual re-strengthening in the dollar.”

“While high inflation is keeping the ECB tightening expectations supported, the euro – which is already embedding a good deal of monetary tightening – is struggling to find any solid bullish driver at the moment.”

“We continue to target a return to the 1.05 area in EUR/USD by the end of this month.”