The Euro (EUR) is weak, down 0.5% in opposition to the US Greenback (USD) and a mid-performer among the many G10 in an atmosphere of broad-based USD energy, Scotiabank’s Chief FX Strategists Shaun Osborne and Eric Theoret observe.
Concentrate on market’s fading dovish ECB pricing
“The EUR remains to be holding above final week’s lows, and motion stays headline-driven within the absence of main home occasions and releases. The newest PMI’s have weighed on the EUR considerably, with manufacturing remaining unchanged at 49.4 (vs. 49.7 exp.) as providers met expectations of fifty.0, climbing modestly from 49.7.”
“This week’s information calendar contains the German IFO figures on Tuesday and France’s inflation information on Friday, in addition to a heavy schedule of ECB audio system all through the week. ECB fee expectations have been shedding their dovish bias, now pricing 20bpts of easing by 12 months finish vs. 25bpts final Monday.”
“The bullish technical image is softening for EUR/USD because the multi-month sequence of upper lows and better highs has been met with slowing momentum and an RSI that has drifted again towards the impartial degree at 50. We proceed to notice the significance of the 50 day MA assist degree at 1.1364. We glance to near-term assist anticipated round 1.1420 and look to resistance above 1.1520.”
