Synopsis:

ING provides an analysis of the expected levels for EUR/USD in the upcoming week, taking into consideration recent positive developments in the Eurozone and ongoing adjustments in the USD.

Key Points:

• Positive News for the Euro: The Euro received a boost following Moody's Investors Service's decision to upgrade the outlook for Italian sovereign debt to stable from negative and to raise Portugal's ratings.
• Speculation Against Italy: Before this announcement, there was market speculation about a possible downgrade of Italy's debt.
• Impact on EUR/USD: This news, combined with the dollar's broad correction, has allowed EUR/USD to trade over 1.09.
• Resistance Levels: ING identifies significant resistance for EUR/USD at the 1.0950/60 level. The bank suggests that failure to break this resistance during the upcoming FOMC minutes could result in the EUR/USD settling into a range between 1.0860 and 1.0960.
• Key Events This Week: The calendar highlight for the week includes numerous ECB speakers and the release of the Eurozone November PMIs on Thursday. These PMIs have been a negative market mover in recent months, and ING’s Eurozone macro team sees limited room for improvement.

Conclusion:

ING's analysis suggests a cautious outlook for the EUR/USD pair in the coming week, with key resistance levels identified at 1.0950/60. The recent positive developments in the Eurozone debt ratings and the broad correction of the dollar provide a supportive backdrop, but the upcoming FOMC minutes and the release of the Eurozone November PMIs will be critical in determining the pair's direction. The expected range is between 1.0860 and 1.0960, with close attention needed on the market's response to the ECB's commentary and economic data.