The Euro (EUR) has shown a slight decline against the US Dollar (USD), down by 0.2%, as it faces resistance in the upper 1.17s. According to Scotiabank strategists Shaun Osborne and Eric Theoret, the recent softening in European Central Bank (ECB) rate expectations has diminished some of the Euro's fundamental support. However, this negative impact has been partially offset by an improvement in broader market sentiment [1].
Market participants are closely watching upcoming economic events, particularly Tuesday's ZEW data, which serves as a leading indicator for industrial production in the euro area. Additionally, speeches from ECB President Lagarde and Chief Economist Lane on Wednesday are highlighted as potential headline risks that could influence market direction [1].
From a technical perspective, the strategists describe the Euro's setup as bullish, with the Relative Strength Index (RSI) in the upper 50s, confirming a broader recovery from the March low. The retracement of the January-March decline is seen as a key feature on the medium-term chart, with near-term resistance identified at the 61.8% Fibonacci level of 1.1825. A full retracement to the January high around 1.2080 is also noted as a potential target. The Euro is expected to trade within a near-term range of 1.1720 to 1.1820 [1].
CONCLUSION
The Euro remains under modest pressure against the US Dollar due to softer ECB rate expectations, but improved market sentiment and a bullish technical outlook provide some support. Key upcoming events, including ZEW data and ECB speeches, are likely to influence near-term direction. Traders are watching resistance levels closely, with the Euro expected to remain range-bound in the short term.