EUR up modestly with focus on next week’s ECB – Scotiabank

The Euro (EUR) is up 0.3% against the US Dollar (USD) and a mid-performer among the G10 as we head into Friday’s NA session, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret note.

Trade remains a key risk

"All eyes are on next week’s ECB as market participants look to confirmation of the latest shift in communication toward a more neutral tone. Yield spreads have stabilized in a EUR-supportive manner, and appear set to push higher following their pullback from late June. Trade policy uncertainty remains a near-term headline risk into early August, and we note the absence of any material progress in US/EU talks."

"This week’s price action has revealed meaningful support below 1.1600 and today’s gains offer the signs of a possible recovery following the pullback from late June. The RSI remains neutral around the 50 threshold, and EUR/USD also remains comfortably above the 50 day MA trend support level at 1.1499. We look to a near-term range bound between 1.1580 support and 1.1700 resistance."