EUR/USD: Spreads are getting narrower – Scotiabank
Preliminary Eurozone CPI rose 0.4% M/M and 2.4% in the year—in line with expectations but up from November’s 2.2%, Scotiabank’s Chief FX Strategist Shaun Osborne notes.
EUR/USD holds in low 1.04s on ECB repricing
“ECB data showed a small rise in 1– and 3 -year inflation expectations in November as well. The data helped extend the reduction in ECB rate cut expectations—marginally—through mid-year. Eurozone/US 2Y spreads have narrowed 25bps to -208bps since December 18th, providing support for the EUR’s modest recovery.”
“The EUR retains a moderately firmer undertone and has the support of potentially bullish signal developing on the weekly chart (it will need to sustain or better early week gains to confirm that). But the market remains shy of pushing through near-term resistance at 1.0450/55 (high/low resistance defined by the past month’s trading range).”
“Gains through here should cement near-term upside potential at least and pave the way for a push to 1.0500/50. Support is 1.0375.”
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FXStreet Insights Team
FXStreet
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