EUR extending consolidation around 1.17 – Scotiabank

The Euro (EUR) is up 0.2% against the US Dollar (USD) and outperforming most of the G10 currencies as we head into Tuesday’s NA session, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

ECB/Fed outlook offers support

"Fundamentals remain supportive for the EUR as markets fade their expectations for ECB easing while softening their outlook for the Fed’s rate path. Near-term risk centers on ECB President Lagarde’s speeches on Wednesday and Saturday, as well as the releases of final CPI figures (Wednesday) and preliminary PMI’s (Thursday)."

"We remain medium-term EUR bulls on the basis of fundamentals and specifically the outlook for relative central bank policy. The latest consolidation looks to be extending with congestion centered around 1.17 and near-term range support offered by the 50 day MA (1.1642)."

"The broader trend is bullish, given the sequence of higher highs and higher lows since February. We look to a near-term range bound between 1.1650 and 1.1750."