EUR/USD neutral/bullish near term – Scotiabank

Shaun Osborne, Chief FX Strategist at Scotiabank, sees the possibility of further upside in the pair in the near term.

Key Quotes

“Weak inflation suggests no rush for the ECB to exit policy accommodation. EZ-US short-term spreads remain onerous at around 200bps at the two year sector of the curve which suggests the EUR should struggle to rally significantly. But the EUR appears to be ignoring weak data and wide spreads today, which says something about the market’s appetite for holding USDs at the moment”.

“EURUSD’s jump in early North American trade suggests the rebound from yesterday’s low can extend a little more. Positive trend signals are aligning across a range of time frames for spot, suggesting that EURUSD dips are liable to remain limited and that new highs are not to be ruled out. Gains through 1.1200/05 confer some additional short-term strength on the EUR”.