EUR/USD: Gains need to push on through 1.0555/1.0560 to challenge resistance at 1.0580/1.0585 – Scotiabank

The EUR is showing some resilience to the general trend higher in the USD. Economists at Scotiabank analyze EUR/USD outlook.

Strong but perhaps “over-owned” USD

Investors may be too pessimistic on Eurozone economic prospects but marginal EUR gains from the intraday low just under 1.0530 perhaps reflect positioning (the long USD trade may be getting a little crowded) more than anything else.

The EUR is trading on a relatively firm basis on the short-term chart but spot remains confined to a narrow trading range and EUR gains need to push on through 1.0555/1.0560 to challenge trend resistance at 1.0580/1.0585. That is a possibility, based on bullish signals from the 1 and 6-hour charts, but the broader strength in the USD may curb EUR gains today.

EUR support is 1.0520/1.0525.