EUR/USD to await the spark from German elections at the top of the 1.17-1.20 range – ING

EUR/USD will be largely rangebound into year-end, according to economists at ING. The question remains whether the German elections will provide a spark.

See: EUR/USD to retest the 1.20-1.21 zone as ECB tapering seems a matter of time – Westpac

European political calendar is getting noticed

“1.17-1.20 may be the EUR/USD range into year-end, with the pair ending towards the top of the range given seasonal dollar weakness.”

“We would expect a broader dollar rally to emerge through 1H2022 as the market grows increasingly confident of the first Fed tightening later in the year.”

“The FX options market prices 30% more volatility than normal around the German election on 26 September. But the French presidential election next April is seen as a much bigger deal for FX markets. Volatility around the run-off vote on 24 April is priced at four times a normal day.”