EUR/USD technical assessment for the near-term outlook changed - Scotiabank

Shaun Osborne, analyst at Scotiabank, notes that EUR/USD technical assessment for the near-term outlook has changed on the basis of the positive price action seen in the past few days.

Key Quotes

“Eurozone-US spreads are little changed at 133bps; the USD yield premium remains supportive and, unless there is a material narrowing in rate differentials, we have to think that scope for USD weakness is limited for the moment.”

“EURUSD short-term technicals: bullish—We have to change our technical assessment for the near-term outlook for the EUR on the basis of the positive price action seen in the past few days.”

“Spot has carved out a bullish reversal formation on the daily candle chart (“morning star”) and is pushing through the 55-day MA (1.1151 today). The market has fully erased the losses seen on Friday and may strengthen a little more towards the mid 1.12 area.”