EUR delivers clear break of 1.16 – Scotiabank

The Euro (EUR) is entering Thursday’s NA session with a modest 0.2% gain against the US Dollar (USD) and a clear break above 1.16, hitting fresh November highs with a push back toward the middle of its range from late June, Scotiabank’s Chief FX Strategists Shaun Osborne and Eric Theoret report.

EUR is supported by market tone

“Sentiment remains dominant as markets celebrate the end of the US government shutdown with broad-based USD weakness and a classic ‘risk on’ tone. Fundamentals are being somewhat ignored, with no discernible reaction to a material disappointment in euro area industrial production data and weaker employment figures from France. Interest rate differentials remain supportive of medium term EUR strength.”

“The RSI has pushed back above the 50 threshold, clearing the neutral level for the first time in over a month. We remain neutral absent a break of the 50 day MA at 1.1662 and note the absence of meaningful resistance above 1.1750. We look to a near-term range bound between 1.1580 and 1.1680.”