EUR/USD preserved its bullish momentum and closed the fourth straight trading day in positive territory on Tuesday. Economists at ING expect the pair to surpass the 1.08 barrier.

FOMC announcement can trigger some recovery in the Dollar

“We think that today’s FOMC announcement can trigger some recovery in the Dollar, and therefore see mostly downside risks for EUR/USD.” 

“At the same time, regulators’ efforts to contain the adverse side-effects of the UBS-CS deal for some bondholder categories appear to be yielding some positive effects for European sentiment, and possibly means that the balance of market concern is now tilted to the US given the still unresolved regional banking crisis.” 

“Beyond the FOMC impact, we think there is room for a break above 1.0800 in the near term as long as sentiment continues to stabilise.”