EUR/USD could see a retest of last week’s low at 1.0635 .

EUR/USD continues to trade well above 1.07. Economists at ING analyze the pair’s outlook.

EUR/USD will find a base in the 1.05/1.07 area this month.The good demand for commodity currencies plus a re-rating of the Real, Rand and Shekel seem to suggest that investors could be moving onto their next big thing – which is the cyclical Dollar decline in the second half of the year. That happens to be our baseline view and one of the reasons we think EUR/USD will find a base in the 1.05/1.07 area this month before pushing to 1.15+ by year-end.

Beyond the US data and the Fed meeting, this week’s focus will be on Thursday’s ECB meeting. It seems too early for the ECB to drop its inflation guard, but a hawkish Fed story could be dominating and EUR/USD could see a retest of last week’s low at 1.0635.

EUR/USD holds steady near 1.0750 amid quiet markets

EUR/USD is holding steady near 1.0750 while consolidating Friday’s pullback early Monday. The main currency pair is on a cautious footing, courtesy of a broadly firmer US Dollar and US Treasury bond yields. Markets stay calm ahead of the Fed, ECB storm.

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GBP/USD struggles below 1.2600 as US Dollar holds ground

GBP/USD is off the highs, defending minor bids below 1.2600 in the early European hours. The pair is struggling for the upside traction, as the US Dollar holds its recovery gains amid a cautious market mood. All eyes remain on the US CPI data and the Fed decision.

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