06:07 AM EDT, 08/20/2024 (MT Newswires) -- EUR/USD continues to grind higher without much news, noted ING.

At the heart of the story is whether EUR/USD will break out of an 18-month trading range, which has largely been between 1.05 and 1.11, wrote the bank in a note.

The foreign exchange options market suggests that -- at least over the next month -- the bias is with the upside, stated ING. The one-month risk reversal -- the price of a EUR/USD call option over an equivalent put option -- is moving deeper in favor of euro calls. This is happening when implied volatility is rising, suggesting active buying of euro call options.

The eurozone calendar remains very light on Tuesday and doesn't pick up until Thursday's PMI releases, pointed out the bank. However, investors get to see the eurozone June current account data on Tuesday.

This is now running close to a 30 billion euros surplus per month (euro positive) compared with the 30 billion euros monthly deficits seen in 2022 -- and a big driver of EUR/USD weakness that year. On that subject, lower oil prices on the back of a potential Middle East peace deal are good news for EUR/USD, according to ING. 1.1040/1050 should prove intra-day support for EUR/USD and the bank sees the 1.1110/1140 as big medium-term resistance -- a break of which would be big news.

Financial markets don't often hear from outgoing Swiss central bank (SNB) President Thomas Jordan but at 11:30 a.m. CET Tuesday he will deliver a speech. ING suspects Jordan will be dovish given that the SNB has been under some pressure from local exporters to deal with the strong Swiss franc (CHF).

Additionally, a technical move from the SNB Monday also points to the dovish side, or at least an adjustment to ensure that dovish policy is properly filtering through Swiss money markets. Monday, the SNB cut the threshold factor on the remuneration of sight deposits, meaning that more of the banking sector's CHF sight deposits would be subject to a discount factor. EUR/CHF nudged a little higher on the news, noted ING.

Any progress on Middle East peace talks could see EUR/CHF edge a little higher. However, the bank thinks a lower global interest rate environment will see EUR/CHF trading in a 0.92-0.95 range later this year.