EUR/USD: Scope to reach 1.10 in the medium-term – Scotiabank

Today’s EUR decline may merely be corrective in nature as it nears the 1.08 level. Economists at Scotiabank believe that the EUR/USD pair could climb as high as 1.10 in the medium-term.

Some market participants are betting on a 50bps hike this year

“The EUR is still maintaining a higher highs and higher lows pattern that supports a breakthrough 1.08 in the near-term. A stretch of trading where it fails to break through the figure opens up a correction, however.”

“Continued inflation beats and a resilient Eurozone economy in the face of high energy prices may continue to bolster 50bps hike bets. This could see the EUR strengthen to 1.10 in the medium-term, something that seemed very unlikely a few weeks ago.”