EUR/USD bearish bias to persist into summer as dollar demand returns

EUR/USD is expected to remain under bearish pressure heading into the summer months, as analysts at ING argue that the dollar is poised to regain favor among currency traders. The pair has been weighed down by diverging economic fundamentals, with the euro area facing rising stagflation risks while the US economy appears better positioned. ING's house call suggests that energy prices will stay elevated or rise further, which could further support the dollar and push EUR/USD toward one-year lows.

For foreign exchange and currency traders, the implications are clear: a stronger dollar typically pressures EUR/USD lower, and the current fundamental backdrop reinforces that trend. The US economy's relative resilience, combined with high energy costs that hurt the euro area more, creates a favorable environment for dollar longs. Traders can monitor live FX prices and charts on NowPrice to track how the market is reacting to these developments in real time.

Looking ahead, key data releases and central bank commentary will be crucial. The European Central Bank's policy stance, particularly regarding inflation and growth, will be closely watched. Any signs of further divergence in monetary policy between the Fed and the ECB could accelerate the move. Additionally, geopolitical developments and energy price trends will remain important drivers. ING's outlook suggests that the path of least resistance for EUR/USD is lower, with potential to test one-year lows if the dollar demand continues to strengthen.