Scotiabank strategists Shaun Osborne and Eric Theoret report that the Euro (EUR) is fractionally higher versus the US Dollar (USD), up 0.1%, and is stabilizing after recent losses, attempting a modest recovery from upper-1.15 lows [1]. The strategists emphasize that market focus remains on fundamentals and the outlook for relative central bank policy, particularly ahead of the upcoming European Central Bank (ECB) meeting on September 10 and the Federal Reserve (Fed) meeting on September 16 [1].
A key data point highlighted is the euro area Consumer Price Index (CPI), which is expected to reach a fresh cycle peak of 3.3% on Tuesday [1]. Yield spreads are showing signs of renewed recovery after a pullback from mid-August, and ECB policymakers are described as overwhelmingly hawkish, managing expectations for a possible September rate hike and hinting at additional tightening before year end [1].
From a technical perspective, the strategists note that the EUR's Relative Strength Index (RSI) has pulled back sharply but remains just above the neutral threshold at 50, with the bullish trend from late June still intact [1]. They see limited further downside for the EUR/USD pair, with support at 1.1550 and 1.1520, and expect the currency to trade in a near-term range between 1.1550 and 1.1650 [1]. There is also the possibility of a medium-term push back above the Q2 highs around 1.18 [1].
No specific market reactions or analyst opinions beyond Scotiabank's outlook are mentioned in the article.
CONCLUSION
The Euro has stabilized against the US Dollar, supported by expectations of a hawkish ECB and a peak in euro area CPI. Scotiabank sees limited downside and a defined trading range in the near term, with the potential for further gains if bullish momentum persists.