EUR/USD has been stabilising in the 0.98-0.99 area after the rally from 0.9700. Analysts at ING expect the pair to challenge the 0.9540 on the round of dollar appreciation.

Domestic picture remains grim

“Dollar strength remains the main hindrance to recovery in the pair, but the domestic picture is still far from looking appealing to investors. Despite a smaller-than-expected slump in the ZEW expectations index, the current situation survey plunged dramatically to -72.2 in October. These are levels last seen only in 2020 and 2009.”

“The easing in gas prices is likely preventing a return to the 0.9540 lows, but we think the next round of dollar appreciation will heavily test that support.”