EUR/USD neutral/bullish near term – Scotiabank

FX Strategists at Scotiabank noted further upside lies on a break above the 1.2025/30 band in the short term.

Key Quotes

“EURUSD fell as low as 1.1940 or so late yesterday before grinding modestly higher through the overnight session despite Eurozone CPI data for Apr coming in a little under expectations at 1.2% Y/Y (versus 1.3% forecast); core CPI eased to 0.7% Y/Y, down from 1.0% in Mar and against expectations of a 0.9% outcome. This was the lowest result for core CPI in more than a year and the absence of any real pressure on the EUR as a result of the disappointing data perhaps suggests that the EUR is starting to find some support near the Jan low (1.1916)”.

“Short term charts show minor signs of positive technical price action through the European session. Firmer demand appears evident in the 1.1975 zone now and that suggests the EUR may be able to test key short term resistance – trend and minor highs – in the 1.2025/30 area in the near-term. We think gains through the 25/30 area would allow for a return to the low 1.21 zone”.