EUR quiet in tight range with mixed data ahead of German CPI – Scotiabank
The Euro (EUR) is quietly consolidating within a remarkably tight range and entering Friday’s NA session unchanged from Thursday’s close, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
Fundamentals for EUR remain supportive
"ECB inflation expectations came in higher than expected, with the 1Y expectation remaining unchanged at 2.6% and the 3Y climbing back to 2.5% at the upper end of its range from late 2023. Germany’s data were mixed, offering an unexpectedly deep m/m contraction in retail sales along with steady/higher state level CPI data ahead of the 8am ET release of the preliminary national figures."
"Fundamentals for EUR remain supportive as the 2Y German-US yield spread threatens a break of the March high. Sentiment also looks to be recovering from this week’s political drama, as risk reversals show signs of stabilization following their recent pullback. We remain medium-term EUR bulls, looking to fundamentally-driven strength."
"The EUR/USD’s technical indicators are close to neutral, offering an RSI just above 50 and continued congestion around the 50 day MA (1.1662). The broader trend is bullish, given the sequence of higher lows and higher highs since February. Descending resistance drawn from the recent highs is currently in the lower 1.17s, and a break would offer a resumption of the medium-term bull trend. We look to a near-term range bound between 1.1620 support and 1.1720 resistance."
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FXStreet Insights Team
FXStreet
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