EUR/USD: Needs to make progress through the 1.04 resistance – Scotiabank

The Euro (EUR) is steady around the 1.04 zone, Scotiabank’s Chief FX Strategist Shaun Osborne notes.  

EUR steady around 1.04

“ECB Governor Escriva remarked earlier that the central bank needed to move to a neutral stance in the coming months. However, Governor Holzmann remains cautious on near-term ECB easing, suggesting he needs ‘good arguments’ to support a rate cut next week. President Lagarde commented that the central bank will maintain its ‘measured’ easing steps yesterday.

“Swaps continue to price in a 1/4 point cut for next week’s meeting. The EUR is holding a tight range intraday after another test of —and failure at—retracement resistance at 1.0422 yesterday. The low 1.04 area has been a block on EUR rebounds since December but the level on the chart is a bit more meaningful now as 1.0422 represents the initial (23.6%) retracement of the EUR’s slide from 1.12.”

“A clear push through the low 1.04 zone should see spot gains extend towards 1.05/1.06. Support is 1.0350.”