EUR extending recovery and threatening fresh highs – Scotiabank
The Euro (EUR) is entering Wednesday’s NA session with an impressive 0.5% gain against the US Dollar (USD), rising in tandem with most of its G10 peers in an environment of broadbased USD weakness.
Technicals seem to be bullish
"The outlook for relative central bank policy remains dominant as markets price in more aggressive easing from the Fed. Interest rate differentials are narrowing from deeply negative levels and offering the EUR support, threatening an extension of the ~75bpt rise observed since late May. Data-wise, Germany released its final CPI figures for July, and headline was unchanged from the preliminary at 2.0% y/y."
"The EUR’s latest gains have delivered a near full retracement of the decline from late July and the EUR is once again threatening fresh multi-year highs. Momentum is bullish, but the RSI is still below 60 and well shy of the overbought threshold at 70. We look to a near-term range bound between 1.1650 support and 1.1750 resistance."