Euro: Upside limited above fair value against US Dollar – Scotiabank
Scotiabank strategists Shaun Osborne and Eric Theoret report EUR/USD consolidating in the mid to upper 1.16s after stronger German IFO and Gross Domestic Product (GDP) data, which should bolster European Central Bank (ECB) confidence ahead of the September 10 meeting.
Euro (EUR) remains relatively stable, trading within the 1.16 to 1.17 range, according to Scotiabank strategists Shaun Osborne and Eric Theoret. The EUR/USD pair has shown signs of consolidation in the mid to upper 1.16s following stronger-than-expected German IFO business sentiment data and Gross Domestic Product (GDP) figures for August.
These economic indicators have bolstered confidence in the European Central Bank (ECB) ahead of its September 10th meeting. However, markets have largely priced in a 25 basis point (bp) hike and further tightening, leaving limited room for additional near-term Euro strength. The EUR is trading slightly above its narrow fair value estimate of 1.1622.
While bullish, the Relative Strength Index (RSI) remains overbought at 70, indicating a potential correction. Support is found around 1.1650 and 1.1600, with the 200-day moving average at 1.1632. Meanwhile, USD gains strength from the cautious market sentiment as investors consider US sanctions on Iran and diplomatic efforts to resolve the situation.
Gold (XAU/USD) also declines, while Bitcoin (BTC) reaches a three-month high above $80,000, reflecting positive risk-on sentiment and technical improvements.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
