The Euro (EUR) is up a modest 0.2% vs. the US Dollar (USD), consolidating around 1.16 and threatening a break of its recent multi-year high, Scotiabank’s Chief FX Strategists Shaun Osborne EUR and Eric Theoret report.
“Fundamentals are once again shifting positively for the EUR, as yield spreads offer support on the back of a fade in easing expectations at the ECB and a renewed pricing of cuts from the Fed. Germany’s IFO business sentiment figures were largely in line with expectations, offering little in terms of near-term price action.”
“The EUR’s primary near-term drivers will remain the broader market’s tone (geopolitics) and the outlook for relative central bank policy. Monday’s recovery was impressive, as the bullish outside day provided for a meaningful recovery from the mid-1.14s toward the mid -June (multi-year) high around 1.16.”
“Momentum is once again firmly bullish, with an RSI back in the mid-60s (64). We continue to highlight the importance of the 50 day MA (1.1372) as a level of medium-term support. The near-term range is likely to be defined by support in the low 1.15s and resistance above 1.1620. Additional resistance is limited ahead of the 1.1680-1.1700 area.”
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