EUR/USD further upside likely – Scotiabank

Pablo Piovano FXStreet

Eric Theoret, FX Strategist at Scotiabank, sees room for an extension of the pair’s upside in the short term.

Key Quotes

“Sentiment and relative central bank policy are providing support on shifting political risks in France following last night’s debate and expectations for the ECB as market participants consider policymakers’ comments regarding the sequence of normalization in the context of the negative interest rate policy. The 2Y Germany U.S. yield spread has narrowed nearly 20bpts since the March 9 ECB meeting, delivering considerable support to EUR. We view the shift in tone as being premature and continue to highlight Draghi’s focus on ‘subdued’ measures of underlying inflation. The sentiment was echoed by Bundesbank President Weidmann’s comments from Monday as he focused on ‘weak’ price pressure”.

“Momentum signals are bullish, DMI’s are confirming, and short-term MA’s are bullishly aligned. EUR appears set to reach the 50% retracement of the post-election drop (1.0821) and we highlight the absence of major resistance ahead of the 200 day MA at 1.0891”.

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 1.0763

50% Bullish
42% Bearish
8% Sideways

Bias Bullish

1 Month

Avg Forecast 1.0650

30% Bullish
60% Bearish
10% Sideways

Bias Bearish

1 Quarter

Avg Forecast 1.0558

15% Bullish
65% Bearish
20% Sideways

Bias Bearish

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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