EUR extends gains to 1.11s low – Scotiabank

Significantly weaker-than-expected French and German industrial production data for July will raise concerns about a lack of momentum in the eurozone economy, but the data barely impacted the euro, which touched 1.1120 earlier, before falling marginally, notes Shaun Osborne, chief FX strategist at Scotiabank. .

Renewed bullish momentum in EUR

“Lower USD yields and tighter short-term EZ/US spreads (2Y at -145bps) have provided key support for recent Euro gains, and the outlook for US rates will continue to drive near-term spot moves.”

“Spot gains through the low area of ​​1.11 help renew the bullish momentum in EUR on the short-term chart and align the intraday DMI with the bullish direction of the daily and weekly studies. The technical picture suggests limited downside potential for the euro and keeps the broader outlook positive.”

“Resistance is at 1.1200, but a weekly close above 1.1160 or so would be technically constructive.”