The Euro-Dollar exchange rate momentum has turned bullish, with Scotiabank looking for further gains towards the 200-day average near 1.1630 once the 1.1550 ceiling gives way.
The Euro finished the week around 1.1558 against the Dollar, sitting at the top of the narrow range that has dominated trading for more than a week.
Foreign exchange analysts at Scotiabank see the recent recovery as the more important signal, despite a lack of fresh fundamental momentum.
“The EUR is quietly consolidating in the lower 1.15s, extending the narrow trading range that has persisted for over a week,” the bank said.
The macro calendar has offered little to push the pair in either direction. German trade data disappointed as stronger imports narrowed the surplus, while June industrial production was broadly in line with expectations.
Scotiabank noted that stronger imports can be “typically seen as a positive from a growth perspective”, but neither release materially shifted EUR/USD.
The rate-spread story has also gone quiet.
“Fundamentally, the recovery in yield spreads looks to have stalled, with a path that remains closely tied to EUR spot,” Scotiabank said.
Its narrow two-year Germany-US spread model puts fair value at 1.1527, leaving “little from a directional perspective”.
EUR/USD has risen around 1.2% over the past month and is now testing the upper edge of its recent 1.1500–1.1550 range.
EUR/USD Technical Outlook: Bullish Above 1.1500
The technical picture is more decisive.
“The latest recovery remains the most important feature of the EUR chart, delivering a critical shift in momentum and a lift in the RSI well above the neutral threshold at 50,” Scotiabank said.
The immediate range has been “roughly bound between 1.1500 and 1.1550”, but the bank remains bullish once that range resolves.
“We remain bullish looking to further gains following a resolution.”
The next medium-term objective is clear.
“We look to the 200 day MA (1.1629) as the next medium-term target.”
That leaves EUR/USD at an interesting point.
Fair value offers little reason to chase the move, but the chart is improving and momentum has turned.
According to the analysts, a sustained break above 1.1550 would put Scotiabank’s 1.1629 target firmly into view.
Our currency coverage draws on live market data, official economic releases and published bank research.
