EUR holds steady in quiet trade ahead of NA session – Scotiabank

The Euro (EUR) is steady, entering Wednesday’s NA session unchanged vs. the US Dollar (USD) in an overall quiet market. The EUR’s range since June has been flat, and its latest pullback has been driven by a combination of broader geopolitical developments and softer CPI data (France, Germany), Scotiabank’s Chief FX Strategists Shaun Osborne and Eric Theoret report.

ECB speakers in focus as guidance stays neutral

“Germany-US spreads have narrowed modestly and eroded some of the EUR’s fundamental support, however they remain elevated just below their recent multi-year highs. The latest data releases have included the preliminary euro area CPI figures, coming in as expected at 2.0% y/y on headline with a fractional miss on core at 2.3% y/y (vs. 2.4% exp.).”

“The euro area contrast with the major country level releases and may provide some support to the EUR as market participants find reassurance. The ECB’s Pereira is scheduled to speak at 5:30pm ET, however the highlight will likely be Chief Economist Lane’s speech on Friday. Policymakers have generally maintained neutral guidance while leaning hawkishly on the ultimate direction of rates.”

“The broader range remains flat and the latest pullback has been minimal. Momentum is neutral with an RSI still hovering around the threshold at 50. We continue to highlight the importance of near-term trend support around the 50 day MA at 1.1647 and look to a near-term range bound between 1.1650 and 1.1750.”