Look for a kneejerk reaction post-ECB; A one-off upside targeting 1.20 - ING

ING on Thursday's ECB decision

ING FX Strategy Research discusses EUR/USD outlook going into the ECB meeting on Thursday.

"We expect the ECB to announce a 'lower for longer' QE tapering, reducing the monthly QE purchases to €25bn and extending them until the end of 2018," ING argues.

"We look for a knee-jerk reaction in EUR/USD higher, potentially testing the 1.20 level.

Yet: (a) the lower for longer QE is anchoring the scale of Bund sell-off; and

(b) Italian elections in early 2018, suggest only a 'one-off' EUR/USD upside," ING argues.

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