EUR gains modestly in tight range – Scotiabank

Euro (EUR) is quietly consolidating within a relatively tight range around the mid-1.09s and strengthening modestly vs. the USD, outpacing all the G10 currencies apart from the havens JPY and CHF. Sentiment continues to dominate as markets focus on trade tensions and assess the risks and implications of retaliatory measures, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

EUR awaits EU retaliation

“European trade ministers are meeting on Monday and headlines have hinted to the possibility of both concessions as well as a more aggressive response, risking a tit-for-tat escalation. In terms of fundamentals, the recovery in US yields is eroding some of the EURs’ support and offering up the potential for near-term weakness.”

“EUR/USD is still consolidating last week’s gains and trading in a relatively tight range roughly bound between support just below 1.09 and resistance above 1.11. Momentum is bullish but fading and the RSI is offering negative divergence, in that it failed to confirm last week’s fresh highs in spot.”