Euro: Slower lending puts key support against US Dollar at risk - ING

Relatively resilient Eurozone activity and the forthcoming 3Q26 GDP figures contrast with tighter lending conditions and softer corporate loan demand, which increase downside risks to EUR/USD’s technical support levels. ING’s Chris Turner notes that the pair is trading at its lowest levels of the year, weighed down by widespread Dollar strength, elevated energy prices and uncertainty over the French budget.

Euro outlook weakens as lending conditions tighten

"EUR/USD remains at the lows of the year as broad dollar strength and an unresolved French budget crisis dominate. "

"Energy prices are at their highs and look to go higher on the prospect of the US and Israel attacking Iran after next week's US midterms. On the eurozone side, activity remains resilient and Friday's release of 3Q26 GDP data should be relatively encouraging. "

"However, yesterday's ECB bank lending survey showed tighter lending conditions and an unexpected fall in corporate loan demand."

"It may be too early for the ECB to pour cold water on market tightening expectations at tomorrow's press conference, but the risks look to be building in that direction."

"This 1.1065/1110 area is quite important support for EUR/USD, below which technical analysts will be dusting off targets at 1.0880."

"Even though the market is reasonably long dollars already, the reasons for EUR/USD to bounce from these levels are conspicuous by their absence."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)