EUR/USD is still undervalued despite rebound – ING

💡 DMK Insight

EUR/USD’s undervaluation could present a buying opportunity, especially with geopolitical shifts in play. As optimism grows around a potential truce in Ukraine, the euro may strengthen against the dollar, pushing the pair closer to its fair value of 1.170. Traders should keep an eye on this level, as a break above could trigger further buying momentum. Additionally, the current sentiment suggests that if the geopolitical situation stabilizes, we could see a significant shift in capital flows towards the euro, impacting not just EUR/USD but also related pairs like GBP/USD and commodity currencies. However, it’s worth noting that any sudden escalation in geopolitical tensions could lead to volatility. Traders should monitor economic indicators from both the Eurozone and the U.S. for clues on future movements. Key metrics to watch include upcoming inflation data and central bank comments, which could influence market sentiment and trading strategies in the short term.