EUR/USD remains resolutely range-bound, fundamentally bearish - Scotiabank

Shaun Osborne, Chief Strategist at Scotiabank notes that they remain fundamentally negative on the EUR and consider wide, short-term rate differentials versus the US a major drag on the EUR’s outlook.

Key Quotes

“Spot remains resolutely range-bound. Eurozone data revealed slightly stronger growth in German regional inflation data for September (versus August) and a slight rise in unemployment this month. Eurozone confidence measures were mixed (better industrial, economic confidence, stable services and consumer readings). There was little to excite the markets. We remain fundamentally negative on the EUR, however, and consider wide, short-term rate differentials versus the US (stuck at multi-year highs at 145bps) a major drag on the EUR’s outlook.”

“EURUSD short-term technicals: neutral/negative—Short term technical parameters are unchanged; short-term momentum measures are flat, suggesting more range-trading. We look for support the broader range to remain 1.1180/1.1280 to persist for now – though we would prefer to look for opportunities to sell in the upper 1.12s.”