EUR/USD: Possible move towards 1.1140 – Scotiabank

The Euro (EUR) is trading at its highest since January as markets anticipate US CPI data coming in soft enough to prompt the Fed to make rapid rate cuts in the coming months, Scotiabank’s chief FX strategist Shaun Osborne notes.

Resistance ahead of the December high at 1.1140

“Real and nominal EZ/US yield spreads are compressing, supporting EUR gains. We estimate spot fair value at 1.1054 currently, so the EUR looks good for these gains and should remain supported on minor dips in the event of any short-term setback.”

“Solid gains in the EUR are backed by a bullish alignment of trend strength oscillators across the short-, medium– and long-term DMIs. That suggests EUR gains can stretch to the upper 1.10s (200-week MA at 1.1068) at least in the short run. There is little in terms of clear resistance ahead of the December high at 1.1140. Support is 1.0950/75.”