Euro: Stabilization after FOMC volatility – Scotiabank

Scotiabank analysts Shaun Osborne and Eric Theoret highlight a slight upward movement in the Euro (EUR) against the US Dollar (USD) following Thursday's modest recovery and efforts to stabilize post-Federal Reserve (FOMC) meeting. They note that market expectations for monetary policy between the European Central Bank (ECB) and the Federal Reserve (Fed) are stabilizing, as ECB officials maintain a hawkish stance amid energy-linked inflation concerns and growth, while German Producer Price Index (PPI) data exceeded forecasts.

The EUR is poised for a minimal gain against the USD as it seeks stability after the recent FOMC proceedings and builds upon Thursday's recovery. Market participants are evaluating the near-term impact of potential tightening measures from the ECB, which remains predominantly hawkish due to energy-related inflation and growth considerations.

Although EUR/USD momentum indicators are still bearish but nearing oversold levels, suggesting minimal further downside from the present levels. In terms of short-term technicals, the EUR/USD pair is currently in a bearish/neutral zone. The stability observed in the spot market indicates supportive short-term levels at 1.1450, with limited resistance anticipated before the mid-1.15 range.