Euro: Bullish trend eyes upper 1.17s against US Dollar – Scotiabank
Scotiabank strategists Shaun Osborne and Eric Theoret report that EUR/USD gains are being driven mainly by broad US Dollar (USD) weakness, with front-end spreads narrowing since late June and supporting Euro (EUR) fundamentals.
Scotiabank analysts Shaun Osborne and Eric Theoret indicate that EUR/USD gains are primarily fueled by a weakening US Dollar (USD), with front-end spreads narrowing since late June bolstering Euro (EUR) fundamentals. Technical analysis suggests a bullish outlook, with EUR having broken above the 1.1625/50 zone, hinting at potential gains up to the mid-to-upper 1.17s.
However, resistance may be encountered around the 1.1793 level, marking a 61.8% retracement of the EUR's decline in the past six months. EUR's upward trajectory was temporarily halted due to negative reactions to US policy decisions, notably the German Producer Price Index (PPI) increasing by a stronger-than-expected 1.1% in July.
The 10-year US Treasury yield steadied at 4.672% after its sharp decline the previous day, as the US Treasury Department doubled the size of long-dated debt buybacks, raising the maximum from $2 billion to at least $4 billion, effective September 9 and running until November 4.
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