ING Forecast: EUR/USD Set to Break Above 1.20 in 2025
ING Euro To Dollar Forecast: EUR/USD Heading Above 1.20
Introduction
The euro may be on track for a stronger rebound against the U.S. dollar, according to a new forecast from ING’s global research team. The bank projects that EUR/USD could climb above 1.20 in the coming quarters, citing a weaker U.S. economic outlook, dovish signals from the Federal Reserve, and growing resilience in the eurozone economy.
ING’s Bullish EUR/USD Outlook
Analysts at ING believe the euro’s recent momentum is not a short-term blip but the start of a sustained appreciation trend. While the dollar has benefited from safe-haven demand and higher U.S. yields in 2023–2024, signs of cooling inflation and a softer U.S. labor market are paving the way for the Fed to pivot toward rate cuts.
Meanwhile, the eurozone economy, though sluggish, has shown surprising resilience in services activity and consumer demand, prompting ING to revise its euro forecasts upward.
Why ING Sees EUR/USD Above 1.20
- Federal Reserve Policy Shift
- ING expects at least 75–100 bps in U.S. rate cuts over the next 12 months.
- Lower yields could erode dollar demand, pushing investors toward other currencies.
- Eurozone Stabilization
- Despite weak manufacturing, services and retail demand are providing a floor.
- The European Central Bank is expected to maintain relatively steady policy, reducing volatility in the euro.
- Global Risk Appetite
- As global growth stabilizes and trade flows normalize, investors may move away from the dollar’s safe-haven status.
- This shift could benefit the euro, particularly if European equities and bonds attract renewed inflows.
Technical Analysis: Key Levels for EUR/USD
- Immediate Resistance: 1.12
Current momentum faces resistance around 1.12. A decisive break would confirm bullish continuation. - Psychological Barrier: 1.15
Traders view 1.15 as the first major test for long-term euro strength. - Target Zone: 1.20–1.22
ING’s base case places EUR/USD above 1.20 within the next 12 months, aligning with technical projections that point toward a multi-year recovery trend. - Support: 1.08
If sentiment turns, 1.08 remains a key floor, where buyers have consistently stepped in.
Risks to the Forecast
While ING’s outlook is bullish, analysts highlight potential downside risks:
- U.S. Inflation Resurgence: A rebound in inflation could delay Fed cuts, supporting the dollar.
- Eurozone Shocks: Political instability or energy price spikes could undermine euro confidence.
- Safe-Haven Flows: Any escalation in global geopolitical tensions may drive investors back to the dollar.
Conclusion
ING’s latest forecast positions the euro as a comeback currency, with EUR/USD projected to climb above 1.20. If the Fed delivers on rate cuts while the eurozone stabilizes, the pair could enter a new bullish cycle. However, traders are reminded that risks remain, and the path higher may be volatile before sustainable gains materialize.
For now, ING’s message is clear: the dollar’s dominance may be waning, and the euro is regaining its strength on the global stage.
