Euro: Resistance at 1.1450 caps upside against US Dollar – Scotiabank

FXStreet Insights Team FXStreet

Scotiabank’s FX strategists report that EUR/USD is softer as regional inflation data point to downside risks for national CPI, even as ECB President Lagarde signals that more tightening could come. Swaps price modest additional tightening by September. Technically, they describe EUR/USD as neutral to bullish, with resistance at 1.1450, support at 1.1300/25, and a break above 1.15 needed to generate more positive Euro momentum.

Euro needs break above 1.15

"ECB President Lagarde said the Iran war had generated “significant” inflationary pressure and that it was not correct to describe the June move as an “insurance” hike– implying more tightening could come."

"Regional state inflation data released earlier this morning reflected decelerating inflation over the June year, however, suggesting a downside risk to the preliminary June national CPI data at 8.00ET."

"The market consensus had expected prices to remain flat on the month and steady at 2.6% over the year. Swaps are broadly steady, pricing in around 15-16bps of tightening risk by September."

"Neutral/bullish—Spot gains are struggling to extend through 1.1450 resistance, keeping trends flattish."

"Support remains 1.1300/25. Gains through 1.15 are needed to give the EUR more positive momentum."

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

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD flirts with two-week tops around 1.3270

GBP/USD makes a U-turn and adds to Monday’s uptick, advancing to the area of two-week highs near 1.3270 on Tuesday. Meanwhile, Cable’s better tone follows a loss of upside traction in the Greenback, always amid the sharp rally in USD/JPY.

EUR/USD stays offered, flirts with 1.1400

EUR/USD manages to reverse the early drop and now trades with marginal gains near 1.1420 on Tuesday. The pair’s recovery comes in response to some loss of momentum in the US Dollar.

Gold keeps the positive mood above $4,000

Following multi-month lows near $3,950, Gold now manages to regain some composure and reclaim the area beyond the key $4,000 yardstick per troy ounce on Wednesday. Still, any meaningful recovery appears limited as a broadly firmer US Dollar and rising US Treasury yields weigh on the yellow metal.

Ripple defends critical support, Stellar extends recovery

Ripple (XRP) trades around the key $1.00 psychological level, consolidating as the token awaits its next directional catalyst. Stellar (XLM) extends its recovery above $0.178 after posting modest gains at the start of this week.

Why a hawkish Bank of Japan could trigger the next Bitcoin sell-off

The Japanese Yen hits a 40-year low of 162.00 against the US Dollar, raising concerns about intervention or additional rate hikes by the Bank of Japan. BoJ may sell US Treasuries to buy back Yen, potentially pushing US bond yields higher and making Bitcoin less attractive to investors.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.