EUR is flat consolidating just below recent multi-year highs – Scotiabank

The Euro (EUR) is entering Monday’s NA session unchanged against the US Dollar (USD) as it consolidates in a tight range in the mid-1.17s just below last Friday’s multi-year high, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

EUR is consolidating ahead of inflation data

"Yield spreads continue to narrow in a EUR-supportive manner, as the outlook for relative central bank policy incorporates a more dovish outlook for the Fed. In terms of data, this week’s highlight will be the release of the Germany’s CPI at 8am ET and will be followed by the preliminary euro area CPI figures on Tuesday. The ECB’s Sintra forum will also offer headline risk with President Lagarde scheduled to speak later today at 3pm ET."

"The medium-term trend remains bullish as we’ve observed a multi-month sequence of higher lows and higher highs since March. The rally has delivered fresh multi-year highs, reaching levels last seen in September 2021. Momentum is bullish, and the RSI is above the overbought threshold at 70 but still shy of its recent peaks around 75. We see little resistance ahead of the upper-1.18 area and expect the near-term range to be bound between support below 1.1680 and resistance around 1.18."