The Euro (EUR) is steady, up modest 0.2% against the US Dollar (USD) as it attempts a tentative recovery from last Friday’s low, Scotiabank's FX strategists Shaun Osborne and Eric Theoret report, Scotiabank's FX strategists Shaun Osborne and Eric Theoret report.

The broader bull trend appears to have reumed

"German IFO business sentiment figures were largely in line with expectations and offered little change from the prior month. This week’s highlight will be the preliminary German CPI figures scheduled for Friday."

"The EUR appears to be once again showing signs of a disconnection from its fundamentals, with yield spreads pushing to fresh highs at levels last seen in September 2024. Measures of sentiment are marginally bullish, with three month risk reversals pricing a slight premium for protection against EUR strength."

"The EUR most recent pullback appears to have found support around 1.1500 and the latest gains are hinting to a resumption of the broader bull trend. The RSI remains bearish below 50 but it has recovered from near-oversold levels in early November and its latest pullback that barely dipped below 40. We are neutral looking to a near-term range bound between 1.1500 and 1.1600."