Key Moments
- EUR/USD moved back below 1.170, with price action largely driven by renewed U.S. dollar strength.
- ING’s Francesco Pesole highlights that easing geopolitical tariff concerns and a framework Greenland deal have supported dollar bulls.
- ING maintains that EUR/USD could decline toward 1.1600 in the short term, with near-term downside risks seen as more likely before upcoming eurozone PMIs.
Dollar Momentum Pressures EUR/USD
EUR/USD has retreated below the 1.170 level as the U.S. dollar regains momentum, according to commentary from ING FX analyst Francesco Pesole. He notes that recent moves in the pair have been shaped primarily by shifts in dollar sentiment, with the easing of geopolitical tariff concerns playing a central role.
Pesole points to the impact of the “unwinding of tariff risk on the back of a framework Greenland deal, which is proving enough to revive some dollar bulls.” He adds that while “The USD downside risks haven’t all disappeared, … further abating of geopolitical tariff risk can favour another gentle leg lower in EUR/USD.”
The Euro is likely to trade sideways, consolidating within the 1.1655–1.1720 range. A clear break above 1.1805 appears unlikely at this stage.
24-HOUR VIEW:
EUR is expected to remain in consolidation. The underlying tone is slightly softer, keeping price action contained within… pic.twitter.com/1W9XyOnbBP— WikiFX.EU (@WikiFXEU) January 22, 2026
Short-Term Outlook: Potential Move Toward 1.1600
ING continues to see room for additional weakness in the common currency against the dollar. Pesole states: “We still see risks extending to 1.1600 in the short term for EUR/USD.” He emphasizes that the current session may offer a more favorable setup for further downside in the pair compared with the next session.
He contrasts today’s environment with the outlook for tomorrow, when “eurozone PMIs are released and can fit the narrative of an improved eurozone macro outlook,” suggesting that incoming data could potentially provide some support for the euro or at least complicate the near-term bearish view.
Key Levels and Risk Focus
| Currency Pair / Factor | Detail |
|---|---|
| EUR/USD spot level | Trading below 1.170 |
| Short-term risk level | Potential extension toward 1.1600 |
| Main driver | Renewed U.S. dollar strength and fading tariff risk following a framework Greenland deal |
| Upcoming event | Eurozone PMIs, which may support an improved eurozone macro narrative |
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