Euro: Technical break points to 1.160 test versus US Dollar – ING

FXStreetMay 15, 2026 8:04 AM

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ING's Francesco Pesole highlights a significant technical break in EUR/USD below 1.170, opening scope for a test of 1.160 in coming days. Pesole stresses that widening EUR:USD two-year swap differentials back towards pre-war levels have removed a key source of Euro (EUR) resilience versus the US Dollar (USD), while political risk is adding a premium to EUR/GBP with upside risks for the cross.

Rate gap widens as support fades

"We saw a pretty significant technical break in EUR/USD at 1.170, which seemed to rapidly pave the way for a test of 1.160 in the coming days."

"While equities are the main driver of the pair, the moves in short-term rate differentials have been big of late. The EUR:USD two-year swap rate gap has widened 20bp from -80bp to -100bp since the start of this week. That is now close to pre-war levels, essentially removing a key driver (hawkish ECB repricing vs the Fed) of EUR/USD resilience during the conflict."

"Elsewhere in Europe, the pound dropped yesterday as markets priced in a greater chance of Andy Burnham entering the PM leadership challenge. The risk premium (EUR/GBP short-term overvaluation) is now 0.8%. It’s starting to look material, but remember that previous instances of intense political/fiscal concerns saw 2%+ risk premium. Risks remain on the upside for EUR/GBP."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Disclaimer: The information provided on this website is for educational and informational purposes only and should not be considered financial or investment advice.

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