Scotiabank strategists Shaun Osborne and Eric Theoret report the Euro (EUR) is slightly softer versus the Dollar (USD), struggling against resistance in the upper 1.17s as softer European Central Bank (ECB) expectations weigh, partly offset by better risk sentiment. They flag upcoming ZEW data and ECB speeches as key event risks. Technically, they describe a bullish setup, eyeing Fibonacci resistance and a defined near-term trading range.

Euro bias stays constructive above 1.17

"The EUR is soft, down a modest 0.2% vs. the USD as it struggles to extend its latest recovery with resistance observed in the upper-1.17s. The recent softening in ECB rate expectations has eroded some of the EUR’s fundamental support however this has been offset by the improvement in broader market sentiment."

"Fundamental releases have been limited and market participants are eyeing Tuesday’s market-moving ZEW data – a leading indicator for industrial production in the euro area. Headline risk lies with Wednesday’s speeches from both ECB President Lagarde and Chief Economist Lane. "

"Bullish – the technical setup remains bullish with an RSI in the upper 50s that confirms the broader recovery from the March low."

"The retracement of the Jan-March decline remains the most important feature of the medium-term chart, as we look to near-term resistance at the 61.8% Fibo at 1.1825 ahead of a full retracement to the January high around 1.2080."

"We look to a near-term range bound between 1.1720 and 1.1820."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)