EUR/USD perspective stays neutral – Scotiabank

Shaun Osborne, Chief FX Strategist at Scotiabank, noted the pair’s outlook remains neutral in the short term.

Key Quotes

“A contentious Macron/Le Pen debate saw the centrist candidate emerge with the perceived “win”. EURUSD remains well supported above 1.09 but we still rather think the EUR will struggle to extend significantly near-term; a Macron win is widely expected and those investors expecting some moderation in the ECB’s easy policy stance still have a while to wait, we think. EZ-US 2Y spreads at 200bps means the EUR is trying to rally with the handbrake fully engaged”

“EURUSD looked well supported in early European trade but the rally has stalled around Tuesday’s high and price action suggests spot is turning lower again. It is still hard to say whether the EUR is topping out or consolidation ahead of another push higher. Underlying technical are firm and rather support the idea of the EUR advancing. Our gut feeling is that downside risks are more significant, however”.