Euro: Key Support Against US Dollar at Risk as Lending Slows - ING

3Q26 GDP data should show relative resilience, according to Chris Turner at ING. Eurozone activity also remains relatively resilient. Yet EUR/USD is trading at its lowest levels of the year as broad US dollar strength, elevated energy prices and French budget uncertainty weigh on the pair. Tighter lending conditions and weaker corporate loan demand increase downside risks to its technical support levels.

Euro Outlook Dims as Lending Weakens

"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.)