Economists at ING discuss EUR/USD outlook ahead of the FOMC meeting.

Positioning may stand against a further EUR/USD advance

“Our base case assumes that a 25 bps Fed hike and remarks that further hikes ‘may yet be required’ will not be enough to feed the EUR/USD bull story. This comes at a time when long Euro positioning amongst the asset management community is relatively high.”

“On balance, we see EUR/USD correcting back to the 1.10 area on the FOMC event risk – but probably not much lower given the ECB meeting the next day. That again could prove mildly bearish for EUR/USD given we favour just a 25 bps hike.”