06:11 AM EST, 11/15/2024 (MT Newswires) -- EUR/USD tested 1.050 on Thursday and then briefly rebounded before coming under pressure again around 1.0580, said ING.

Intraday volatility will likely be the norm for the coming days due to a stretched long US dollar positioning, but it's clear that the momentum on EUR/USD remains bearish and investors will remain attracted to selling the rallies, wrote the bank in a note.

The minutes of the October European Central Bank meeting showed an ongoing debate about the disinflationary trend, and some hawkish members were reluctant to go for a rate cut that was described as a "risk management" move, stated ING. There is a clear shift from inflation to growth concerns in the Governing Council, but no indications of a strong consensus for an acceleration in easing.

The bank's view remains that a 50bps move in December remains very much possible, and ING expects a bearish impact on the euro given markets are pricing in just over 30bps.

Friday, investors will hear from Fabio Panetta, Philip Lane and Piero Cipollone, three dovish-leaning ECB members. The 1.0500 level is a key one for the US dollar and the bank can probably expect good support also considering the positioning picture. Still, ING's call for year-end remains at 1.040.

The United Kingdom's gross domestic product was a bit disappointing on Friday, owing to a surprise fall in activity during September, stated the bank. The 0.1% Q3 figure is a far cry from the 0.7% and 0.5% in Q1 and Q2.

The economy has slowed but not as much as the figures suggest, pointed out ING. A lot of that strength seen in the first half of the year was in non-tradable and non-consumer sectors that have less to do with underlying economic fundamentals.

The Bank of England has agreed that the true rate of growth was probably slower in the first half. However ING thinks the BoE/consensus forecast for the winter is a bit high, and while real wage growth should generate higher GDP, the pace is set to be fairly moderate in the near term before receiving a bit of a budget boost next year

GDP was a bit weaker than expected, but it's still not that surprising, particularly given the volatility in the recent data. The BoE is much more focused on the services inflation figures that investors will get next week. In the near term, they're likely to remain sticky at around 5%. Barring a downside surprise, the bank believes a pause in December is the most likely outcome.

EUR/GBP has hovered just above 0.830 as a wide rate differential continues to put pressure on the pair. Given ING sees a low probability of the BoE cutting in December while the bank's call is for a 50bps move by the ECB next month, it struggles to see much upside for EUR/GBP before year-end.