May extend losses to the mid-1.10s – Scotiabank

The Euro (EUR) has lost 0.5% over the course of the session so far as EUR consolidation from earlier in the week develops into a little more softness, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

EUR slips despite some narrowing in short-term EZ/US spreads

“Absent any data or fundamental developments, short-term flows appear to be driving movement on the session. Note that EZ/US 2Y spreads have narrowed further today (-147bps, the narrowest since mid-2023) which suggests EUR losses may snap higher again after month -end flows run off.”

“EUR/USD drift has undercut short-term bull trend momentum and spot risks easing a bit more to test key short-term support at 1.1100/10. Price action suggests a minor peak may have been reached around 1.12 over the turn of the week. A push under 1.1100 may see losses extend to the mid-1.10s.”