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Euro stays in 1.15 to 1.16 range versus dollar, Scotiabank says
Scotiabank points to a constructive backdrop from US Germany 2-year spreads and risk reversals, while technicians flag resistance near 1.1550 and the 200-day moving average around 1.1630.
Scotiabank strategists Shaun Osborne and Eric Theoret said the euro is steady in the mid to lower 1.15 area against the US dollar, trading close to fair value based on 2-year US Germany spreads.
They described fundamentals and sentiment as constructive, supporting a euro recovery since early Q3, with recent services and composite PMI readings showing only a fractional improvement versus preliminary prints even as France and Germany saw a slight contraction in July.
On the short-term outlook, Scotiabank called technicals bullish, pointing to resistance around 1.1550 and a preferred near-term range between 1.1500 and 1.1600 ahead of the 200-day moving average near 1.1630.