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Euro holds mid-1.15s as yield spreads and trade surplus support EUR/USD
Scotiabank cites euro area Q2 GDP growth of 0.4% quarter over quarter and a return to a June trade surplus, alongside supportive 2-year yield spreads.
Scotiabank strategists Shaun Osborne and Eric Theoret say EUR/USD is trading in the mid-1.15s with modest gains versus the US dollar, supported by improving euro area fundamentals and a rebound in euro yield spreads. They note a narrow fair value estimate at 1.1641 for the pair based on the 2-year Germany-US yield spread, which they say sits above current spot.
The bank points to euro area data that included Q2 GDP growth of 0.4% quarter over quarter and 1.0% year over year, along with a trade balance that returned to surplus in June after a short-lived deficit between March and May. In their view, those developments align with the euro’s recovery in yield spreads.
Scotiabank also describes near-term technical conditions as supportive, with bullish signals including an RSI back above 60. They identify support near 1.1500, resistance around 1.1580, and additional levels tied to the 50-day moving average near 1.1466 and the 200-day moving average around 1.1630.
Latest closeEUR/USD 1.138 ▼0.6%