This quarter EUR/USD will struggle to maintain a break above 1.10

As investors return from their Easter holiday, the EUR/USD is experiencing little support. According to experts at ING, the critical event of the day will be the US Core CPI, which will determine if the pair has a chance of breaching above 1.10.

1.10 should be challenging to solve
"Two-year EURUSD swap differentials are quite stable at close to 100 bps in the Dollar's favor. Perhaps we shouldn't anticipate too much more narrowing at this time.

"Two-year US Treasury rates are now trading at a 100 basis point discount to the Fed funds rate; if the Fed raises in May, the difference might increase to 125 basis points. The 125–150 bps range is a significant historical discount for US two-year rates. A much more significant additional downside for two-year yields may only materialize until the Fed is prepared or has begun relaxing, which is most likely in the fourth quarter.

"EUR/USD should trade in a band between 1.0900 and 1.0950 into the crucial US CPI announcement."