EUR/USD: the ECB will soon announce tapering of QE, supporting the euro on the forex (ING)

ING believes that the EUR/USD will move upwards in the short and medium terms with the support of the ECB.

"The removal of risk from the French election has allowed investors to totally focus on the forex's next major theme: the ECB's QE reduction. This was reinforced by yesterday's Reuters report, which indicates that some members of the ECB wish to announce the reduction of QE as of the June meeting. While we don't think the ECB will be tapering it this Thursday (Draghi might even try to calm market expectations), the direction of the trip seems very clear (tapering should be announced in September, or even potentially in June).

It will therefore be difficult for Draghi to curb the upward trend of the EUR that is currently building. With the overall neutral positioning on the EUR/USD and the undervaluation of the pair, the trend seems to be on the rise, with the downturn expected to remain limited from now on."