EUR holds around 1.03 – Scotiabank

The Euro (EUR) is little changed against the US Dollar (USD) on Friday, holding around the mid-point of Wednesday’s wide range, Scotiabank's Chief FX Strategist Shaun Osborne notes.

Charts show tentatively positive signals

"ECB Governor Nagel commented a little earlier that the central bank should not rush rate cuts, echoing Holzmann’s remark earlier this week. Nagel said that inflation was still elevated and uncertainty was high. Eurozone CPI was finalized at 2.4% in the December year earlier, in line with the preliminary data."

"Spot has swung in a 50/60 tick range around 1.03 for much of the week. Short-term patterns suggest more range trading today as bear trend momentum weakens. Longer term patterns are still tilting positive for the EUR, however; I have noted the bullish 'morning star' pattern on the daily candle chart that developed around the turn of the week previously."

"That signal remains intact, even if progress has stalled since Wednesday. The weekly chart may also show a bull signal (“piercing line”) if the EUR can sustain gains into the close of the week. Ordinarily, this would be a strong sign that a push higher will develop but the macro backdrop rather suggests that directional risks are tipping in the other direction for the EUR."