EUR/USD remains close to the highs of the year. Economists at ING analyze the pair’s outlook ahead of the European Central Bank (ECB) meeting.

Positioning is probably the biggest headwind to EUR/USD

“Today should see a 25 bps ECB hike and it is now probably stretched positioning which is the biggest headwind to further EUR/USD gains.”

“There is a risk that the hawkish ECB sends EUR/USD through 1.1100 today, but a) long positioning is quite stretched and b) a hawkish ECB is priced. This warns that EUR/USD could hang around this 1.10 area a little longer – particularly were the US equity sell-off to gain momentum.”