EUR/USD could challenge the 1.0850 area – ING

EUR/USD is currently going through its third significant correction of the year. Economists at ING analyze the pair’s outlook.

EUR/USD dip should be temporary

Unless US activity data surprisingly softens today, expect EUR/USD to continue to press the 100-DMA near 1.0930, below which there is an outside risk to the 1.0850 area. 

We do, however, believe this dip should be temporary and continue to forecast 1.12 by the end of September on further signs of US disinflation and finally some softer US activity data, too.