The Euro (EUR/USD) eased by 0.3% on Monday, trimming part of Friday’s rally. Analysts at Scotiabank, including Shaun Osborne and Eric Theoret, say the currency remains supported by strong fundamentals, even as short-term resistance slows momentum.
Yield Spreads Back the Euro
Scotiabank notes that widening yield spreads continue to provide a firm base for the euro’s strength. Diverging central bank policies remain supportive, keeping the euro attractive for investors.
Germany’s latest IFO business climate survey showed mixed results. Still, markets are more focused on Germany’s preliminary August CPI, due Friday, which could shape expectations for European Central Bank (ECB) policy.
Technical Outlook for EUR/USD
Friday’s session saw the euro post a bullish outside reversal, breaking back above its 50-day moving average. However, momentum signals remain cautious:
- The RSI is close to 50, showing neutral momentum.
- Descending resistance continues to cap upside potential.
Scotiabank projects a near-term trading range of:
- Support: 1.1650
- Resistance: 1.1750
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