EUR/USD: Some flattening around 1.0900 is likely – ING

Economists at ING expect some stabilisation in EUR/USD after strong jobless claims fuelled the Dollar rebound.

PMI test for positioning
Today’s PMI surveys will be a new opportunity for markets to gauge whether Eurozone growth sentiment has indeed bottomed out.

From an FX perspective, the reaction to the November PMIs will tell us how much position-squaring effects are still playing a role in EUR/USD. Should a surprise in either direction be followed by an exacerbated move in EUR/USD despite thinner trading on Thanksgiving, then we would conclude positioning imbalances persist. We think, however, that some flattening around 1.0900 is more likely.