Euro: Bullish momentum eyes mid‑1.17s against US Dollar – Scotiabank

FXStreet Insights Team FXStreet

Scotiabank strategists Shaun Osborne and Eric Theoret report the Euro (EUR) is firming as Eurozone economic resilience and narrowing yield spreads versus the US support EUR/USD. Short-term technicals are described as bullish, with intraday and daily momentum positive and the weekly study close to turning higher. They see a push through 1.1625/50 opening further gains toward the mid‑1.17s, with support at 1.1550/75.

Euro supported by resilience and yield spreads

"The firming trend in the EUR reflects economic resilience in the Eurozone despite headwinds from energy and drought conditions as well as the narrowing yield spreads between the Eurozone and the US."

"While the yield gap remains substantial in the USD, the 2Y spread has narrowed to –136bps this morning, the smallest US yield advantage since May."

"Bullish—The EUR is firmer for a fourth week running. Intraday and daily trend momentum is bullish and the weekly study is close to flipping to positive."

"The short-term bull objective will be an extension through the 1.1625/50 range which should then open up further gains to the mid-1.17s. Support is 1.1550/75."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

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