EUR/USD managed to nudge up to a new high yesterday. Economists at ING believe that the pair could test last May's high at 1.0785.

High natural gas prices could well come back and bite the Euro later in the year

“For the time being, we would prefer to back further EUR/USD strength – should today's US event risks allow. This could see EUR/USD pressing last May's high at 1.0785.” 

“This week there is an outside risk of 1.0950 should Thursday's US December CPI show another soft reading.”

“Before we dust off the call to 1.15, we should note that a re-opened China will compete for global LNG supplies. This means that the issue of high natural gas prices could well come back and bite the eurozone and the Euro later in the year.”