Euro: Hawkish ECB hike expected to support EUR against US Dollar – Scotiabank
Scotiabank strategists Shaun Osborne and Eric Theoret report EUR/USD is flat in North American trade after touching a one-week high, with fundamentals supported by firmer European Central Bank (ECB) rate expectations on higher Oil prices.
Scotiabank analysts foresee a hawkish ECB interest rate increase taking place this Thursday, which could bolster the Euro against the US Dollar. The fundamental support for the EUR/USD exchange rate is attributed to higher oil prices and increased confidence in the European Central Bank's (ECB) future rate hikes. The strategists expect a 25 basis point hike on Thursday and another in December, with a potential resistance level at 1.1680/1.1700.
Support is anticipated below 1.1580. The Euro entered the North American session flat against the US Dollar after a one-week high. The EUR's stability is due to upgraded ECB rate expectations stemming from recent oil price rises, highlighting the ECB's sensitivity to energy risks. No significant data releases are expected prior to the upcoming ZEW sentiment figures.
The Euro is trading near marginal one-week highs in the mid-1.16s, and the RSI is approaching the upper 50 area, indicating potential for further gains. Although the 200-day moving average provides some resistance, there appears to be minimal resistance before the 1.1680/1.1700 level. Near-term support is seen below 1.1580.
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