EUR outperforming on relative risk & central bank policy – Scotiabank

Euro (EUR) is up an impressive 1.25% against. the US Dollar (USD) and outperforming all of the G10 currencies with the exception of Swiss Franc (CHF), Scotiabank's Chief FX Strategist Shaun Osborne notes.

Momentum is extremely bullish

"The reassessment of global risks favoring flows away from the USD continues to drive the bulk of the price action, and the outlook for relative central bank policy is offering additional support in the aftermath of last week’s ECB meeting and its apparent shift toward a more neutral rate outlook. Data wise, we’re eyeing this week’s preliminary PMI’s scheduled for release on Wednesday."

"EUR/USD’s gains are impressive, given its sharp gains pushing to levels last seen in late 2021. Momentum is extremely bullish with an RSI just above 75. We see the potential for near-term resistance around 1.16 would now expect support below 1.14 (prior resistance)."