He Euro (EUR) The pair maintains a firm tone. Dips towards levels above 1.0850 were well supported in overnight trading and the pair has reclaimed the 1.09 area quite easily during European trading, reaching a new marginal short-term high (the highest since March), he notes. Shaun Osborne, Chief FX Strategist at Scotiabank.
There is room for a further jump towards 1.0950/80
“Significantly tighter spreads between the EZ and the US—the 2-year gap has narrowed to –162bps, the narrowest since March—plus some normalization in 10-year OAT/Bund spreads explain the strong EUR performance in recent weeks. Our fair value estimate suggests 1.10+ may be achievable in the near term. No rate change is expected at Thursday’s ECB policy decision.”
“The EUR has built up quite strong technical momentum. The price is trading at a new high and gains are strongly supported by bullishly tilted trend strength indicators on the intraday, daily and weekly DMIs.”
“This should mean pressure for further gains and limited scope for EUR corrections for now. Gains through the 1.0950 zone point to additional strength towards 1.0950/80. Support is 1.0860/80.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
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