Euro: Recovery holds within 1.15–1.16 band against US Dollar – Scotiabank
Scotiabank strategists Shaun Osborne and Eric Theoret describe the Euro (EUR) as steady in the mid-to-lower 1.15 area, trading close to fair value based on 2-year US–Germany spreads. Fundamentals and sentiment are seen as constructive, underpinning EUR recovery since early Q3.
Scotiabank analysts Shaun Osborne and Eric Theoret maintain that the Euro (EUR) is presently stable within a 1.15–1.16 range against the US Dollar. They assess the situation as constructive, citing favorable fundamentals and sentiment since early Q3. Technical indicators point to bullish momentum, with resistance near 1.1550 and a near-term trading range between 1.1500 and 1.1600, before approaching the 200-day moving average at 1.1630.
Recent improvement in German and French services and composite PMI's, despite a contraction in those countries, suggests marginal growth across the euro area. The EUR's recent consolidation aligns with a narrow fair value estimate based on 2-year US–Germany spread, implying limited directional risk. Both economic fundamentals and market sentiment support the EUR's recent recovery.
Bullish sentiment highlights the EUR's momentum shift, breaking through the 50-day moving average (1.1476). While a 1.1550 resistance level presents short-term challenges, the EUR is expected to range between 1.1500 and 1.1600 in the near term.
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