EUR/USD: Potential for gains seen between 1.1680 and 1.1780 range – Scotiabank

Euro Strengthens Amid Positive Technical Indicators

According to Scotiabank analysts Shaun Osborne and Eric Theoret, the Euro continues to consolidate near the 1.17 mark, following sentiment-driven gains as geopolitical tensions ease. They point to favorable risk reversals, supportive yield differentials, and a decline in demand for downside protection as key factors.

The Euro is maintaining its upward momentum, entering Friday’s North American trading session with a slight 0.1% increase against the US dollar. The currency’s recent stabilization around 1.17 reflects a recovery fueled by improved market sentiment.

Improvement in risk reversals indicates waning concerns about Euro weakness, allowing investors to focus more on economic fundamentals.

Yield spreads are currently advantageous for the Euro, presenting potential for further gains in the short term.

Technical analysis shows a bullish outlook, with the Relative Strength Index (RSI) well above 50, signaling strong momentum after a sharp drop to oversold levels in mid-March.

Resistance is minimal before reaching 1.18, a price point that previously saw significant trading activity in late February. The anticipated trading range for the near term is between 1.1680 and 1.1780.

This article was produced with assistance from an AI tool and reviewed by an editor.