06:14 AM EDT, 06/16/2025 (MT Newswires) -- The eurozone's dependence on energy price exports should put a curb on EUR/USD upside in ING's view.

The bank had already argued before the Israel-Iran conflict began that moves beyond 1.1600 started to look too stretched based on previous peaks of misvaluation. At the time of writing, the short-term fair value is just below 1.110 according to ING's model, and moves below 1.1640 would send the pair beyond the three-standard-deviation upper bound.

Anyway, price action in the coming days will be heavily dependent on oil market volatility and the US dollar moves, wrote the bank in a note to clients.

On the eurozone side, the main highlights are Germany's ZEW survey results out on Tuesday, and a few speeches by the European Central Bank's Governing Council members. Monday, investors hear from both sides of the spectrum: hawk Joachim Nagel and dove Piero Cipollone.

ING estimates a lot of action in other European central banks. The Riksbank (Wednesday) and the Swiss National Bank (Thursday) are both expected to cut rates by 25bps, although for the former, it is a closer call in light of the latest oil price shocks. ING predicts holds by the Bank of England and Norges Bank on Thursday.

On Thursday, Turkey's central bank (CBT) meets. ING expects rates to remain unchanged at 46%, in line with market expectations. Given continued disinflation and an improving appetite for lira (TRY) assets, the CBT has started easing liquidity conditions to normalize the average funding cost around the one-week repo rate.

With this easing, the bank assumes that the CBT will want to wait for the July meeting to begin cutting rates.

ING believes higher energy and oil prices are a reason for central and Eastern European (CEE) central banks to be more hawkish versus current market pricing, which should protect foreign exchange from more weakness. As a consequence, the current weaker levels look attractive, especially in the Czech Republic's koruna (CZK) and Poland's zloty (PLN).

Monday's open may start in a risk-off mood again after this weekend's events, putting further pressure on CEE currencies, but ING believes the medium-term picture is positive thanks to the hawkish bias of central banks for the region's currencies.