EUR/USD is well above 1.04. 1.05/1.06 is the risk for the world’s most popular currency pair, economists at ING note.

Weak global demand is not a good story for the pro-cyclical Euro

“Resistance is clearly set at the 1.0480/1.0500 area, above which we could see a spike to the 1.0600/0620 area. That is not our preferred view, but thinning December markets and seasonal Dollar weakness mean that such a scenario cannot be ruled out.”

“Bigger picture, however, weak global demand is not a good story for the pro-cyclical Euro. Additionally, colder weather coming to northern Europe is starting to push gas prices higher again and keep the eurozone trade balance under pressure.”

“We would like to think that 1.05/1.06 is as good as it gets for EUR/USD in December.”