EUR/USD returns to the neutral bias – Scotiabank

FX Strategists at Scotiabank noted the outlook on the pair has shifted to neutral in the near term.

Key Quotes

“Opinion polls suggest centrist candidate Macron has derived some additional support from his election pact with leftist Bayrou but concerns around the French presidential election outcome are likely to remain elevated through the vote itself, considering how poorly opinion polls have tracked underlying voter sentiment elsewhere recently”.

“Meanwhile, negative nominal, short-term yields near 1% for core EZ bonds represent a significant fundamental negative for the EUR from our perspective. We remain bearish EURUSD”.

“EURUSD looks a little steadier on the chart after the mid-week bounce from the 1.05 area. Daily gains through Thursday appear to have “confirmed” a low in place and the market is testing the 55-day MA in the low 1.06 area at writing where good selling interest emerged earlier in European trade. We see resistance at 1.0605/10 on the session”.