The Euro (EUR) is quietly consolidating this week’s rally to a recent multi-year excessive and coming into Friday’s NA session largely unchanged in opposition to the US Greenback (USD), Scotiabank’s Chief FX Strategists Shaun Osborne and Eric Theoret report.
ECB Sintra discussion board subsequent week
“The newest EUR good points have been basically pushed, underpinned by a EUR-supportive narrowing in deeply unfavourable yield spreads between Europe and the US. The narrowing has been primarily pushed by developments exterior of Europe and particularly a reassessment of expectations for the Fed. For Europe, this week’s releases supplied little by way of the narrative as PMI’s remained near 50 (no progress or contraction) whereas France launched barely stronger than anticipated preliminary CPI information – albeit with a headline print of 0.9%.”
“ECB policymakers have been vocal in speaking a broadly impartial tone, pushing again considerably in opposition to a short-term charges market that continues to cost about 25bpts of easing by December. The ECB will host its Sintra discussion board (the ECB’s Jackson Gap equal) subsequent week from Monday to Wednesday. On commerce, US/EU negotiations are continuing privately and EU member states seem like divided on their response to tariffs (retaliation).”
“The pattern is bullish, momentum indicators are confirming, and the RSI’s push to 70 leaves it considerably overbought however nonetheless wanting the momentum peaks reached in March and April round 75. We proceed to focus on the significance of the 50 day MA as a stage of medium-term help. We glance to near-term help nearer to 1.1600. When it comes to resistance, we see little forward of the 1.1850/1.1880 space.”
