EUR steady ahead of Thursday’s ECB – Scotiabank
|The Euro (EUR) is entering Wednesday’s NA session flat against the US Dollar (USD) and also unchanged from Friday’s close, having relinquished much of its gains observed earlier in the week, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
Range bound between 1.1650 and 1.1750
"There have been no major overnight releases and markets remained focused on Thursday’s ECB with a widely expected hold. Forecast changes will be closely scrutinized, however few surprises are expected in terms of their implications for the ECB’s rate outlook as policymakers have generally maintained a neutral tone in their recent comments."
"Fundamentally, interest rate differentials remain supportive for the EUR, as yield spreads trend higher on Fed/ECB divergence. In France, President Macron has appointed former defense minister Lecornu to become his latest PM. Bond markets remain generally calm, though France’s yields are now trading in tandem with Italy’s."
"The EUR’s bullish break has faltered somewhat and recent price action has delivered a pullback to the descending trend line drawn from the July highs. The trend line had been broken earlier this week, and the nearterm direction is pivotal as we consider the possibility of a push to fresh multi-year highs. Failure from here would be consequential. The RSI has softened back toward the neutral level of 50. We look to a near-term range bound between 1.1650 and 1.1750."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.