Encounters better selling pressure in upper 1.11s – Scotiabank

EUR/USD retains a firm undertone but EUR has drifted off its best levels of the week as short-term yield spreads correct slightly from the peak seen earlier this week, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

Price action is neutral on the intraday chart

“Narrower EZ/US yield spreads overall (the narrowest in more than a year) remain a prime driver of EUR gains and suggest limited scope for EUR losses in the short run at least.”

“The intraday chart reflects better selling pressure developing in the upper 1.11s over the past day or so as investors book profits on EUR longs. Price action is neutral on the intraday chart but broader trends are positive, backed by bullishly-aligned trend strength signals on the short-, medium– and long-term oscillators.”

“Minor EUR dips to the upper 1.10s/low 1.11s should remain well-supported.”