Don’t chase the EUR/USD rally – ING

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ING Research sees limited scope for further EUR/USD gains in the near-term.

“We do not expect this modestly softer US rate environment to
last too long. We would favour 1.0350/0400 proving the top of the
August trading range for EUR/USD,” ING notes.

“In addition to the Russian threat from energy prices, the European
manufacturing industry now has to contend with drought conditions and
low water levels on the Rhine. That will challenge coal shipments,
amongst other cargoes, and is keeping European natural gas prices bid
near the highs. This factor remains an outright euro negative,” ING
adds.