EUR remarkably quiet despite political turmoil in Germany – Scotiabank

The Euro (EUR) is quiet and trading within a remarkably tight range, given the broader context of uncertainty and German Chancellor Merz’ failure to secure a majority for his confirmation vote in the German parliament, Scotiabank's Chief FX Strategist Shaun Osborne notes.

RSI reveals a meaningful waning in momentum

"The news has weighed on European equity indices with the German DAX trading down 1% on the day and stocks across France, Italy, Spain and the Netherlands trading lower in sympathy. Fundamentals have surprised to the upside with the final services PMI coming in just above 50, the dividing threshold between expansion and contraction."

"We continue to look to nearterm risk in ECB speaking engagements into the end of the week, specifically within the context of last week’s CPI surprise."

"EUR/USD has been stuck in a flat congestion range since early April. Support is seen below 1.13 and resistance is seen above 1.14. The RSI reveals a meaningful waning in momentum, despite it remaining in slightly bullish territory above 50."