EUR: ECB starting to express some concern over euro strength - ING

The Financial Times is running a story today on ECB officials questioning whether the euro has strengthened too much. The macro arguments here would be that with the trade-weighted euro now rising at a 4% YoY rate, lower import prices could see the eurozone CPI undershooting its 2% target, ING's FX analyst Chris Turner notes.

Not much resistance until the 1.1900/1910 are

"The ECB's response here would have to be earlier and larger rate cuts, given that unilateral intervention to sell EUR/USD is politically unacceptable and would not work. These macro concerns over euro strength are at odds with the view that Europe should be taking advantage of this 'global euro' moment - and we'd back the latter story here, where global portfolio re-allocated to the eurozone can only be a good thing for private sector borrowing costs."

"As above, NFP is the big story today, although we will have the release of the June ECB meeting minutes. Recall there was one dissenter in the decision to cut rates by 25bp to 2.00%."

"EUR/USD remains well bid and it seems foolish to try and pick a top. There really is not much resistance until the 1.1900/1910 area, which could be seen at a stretch if NFP were negative, for example. Barring that, the default position is probably a 1.1750-1.1820 trading range ahead of more trade-related volatility next week. For reference, the FX options market also prices a 70 pip range for EUR/USD today as well."