Economists at ING analyze EUR/USD outlook for this week. 

EUR/USD faces some stretched positioning in the near term

“Net long positions are now worth 22% of open interest, the highest since January 2021 and not far from 27% five-year highs. This mostly has implications for the near term, so, while we remain resolutely bullish on EUR/USD in the longer run on the back of US-Eurozone (and Fed-ECB) divergence and pronounced undervaluation, we flag positioning as one reason to be cautious on the short-term outlook.k