EUR/USD set to retest July's 0.9950 low – ING

EUR/USD is struggling to stage a recovery following last week's sharp decline. The pair remains very heavy and could sink below parity at any time, analysts at ING report. 

Adding to the sell-off may well be the portfolio adjustments of Asian central banks 

“Asian FX remains under heavy pressure and will prompt intervention to sell dollars and support local currencies. Asian FX reserve managers will then need to sell EUR/USD to re-balance FX portfolios to benchmark weightings.”

“The market prices a 54 bps rate hike for the September 8th meeting. Could the ECB start to discuss prospects of more aggressive rate increases if it wants to offer EUR/USD some support? Watch out for any speeches from the hawks in northern Europe this week.”

“A retest of July's 0.9950 low looks to be the bias for EUR/USD this week.”