EUR rises – Scotiabank

EUR/USD is slightly firmer, with spot prices ticking up as a reflection of the USD’s overall soft tone, notes Shaun Osborne, chief FX strategist at Scotiabank.

The earnings period remains limited ahead of Thursday’s ECB

“The euro (EUR) is unlikely to shine ahead of Thursday’s ECB policy decision. A 25bps rate cut is expected and fully priced in, but the outlook for rates is perhaps more important to the near-term direction of rates. Markets are pricing in 64bps of total easing between now and the end of the year. That’s a bit faster than the pace of tapering per quarter the ECB seems to be operating at.”

“Intraday price action suggests a low/reversal formed around this week’s low of 1.1015 (bullish morning star pattern on 6-hour chart). But gains stalled in the mid-1.10s and short-term trend momentum signals continue to be bearish for the EUR. Gains to 1.1070/75 would give the EUR a bit more intraday momentum. Key near-term support is now 1.1015.”