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ING's foreign exchange team has highlighted that despite Europe's improved gas supply situation compared to 2022, the euro remains under pressure against the US dollar. The key technical level of 1.150 has emerged as a critical support zone for the EUR/USD pair, with a breakdown below this level likely to trigger further weakness. Analysts note that divergent monetary policy trajectories between the European Central Bank (ECB) and the Federal Reserve are amplifying the euro's vulnerability, particularly as the Fed maintains a hawkish stance while the ECB faces inflationary headwinds. For forex traders, this analysis underscores the importance of monitoring technical levels and central bank policy differentials. A sustained move below 1.150 could open the door for a test of 1.1200-1.1300 levels, while a rebound above 1.1650 might signal a potential reversal. The EUR/USD pair has been one of the most liquid and actively traded currency pairs, making it a focal point for both institutional and retail investors in the MENA region who have significant exposure to European and US markets. Looking ahead, investors should closely watch upcoming ECB and Fed policy decisions, as well as European gas storage data and US nonfarm payrolls. The 1.150 level will serve as a key psychological and technical benchmark. A decisive break below this level could accelerate capital flows into the dollar, while a successful defense might provide a short-term buying opportunity for euro bulls.
