EUR/USD appears supported on dips – Scotiabank

FX Strategists at Scotiabank keep their bullish stance on the pair in the near term, adding that dips should remain shallow for the time being.

Key Quotes

“We remain of the view that an ECB policy shift remains a distant prospect but that may not matter for the EUR in the near-tomedium term and we continue to think that fundamentally, the EUR remains attractive while shifting political risks and focus on US structural issues (deficits) suggest more EURUSD gains are possible”.

“The underlying technical bid for the EUR remains strong, in our opinion. The EUR is trading firmly and a decent close tonight (spot has not closed above 1.2430 over the past week) should help propel the EUR higher still. We see limited downside risk for the EUR at the moment and rather feel that while short-term trend support at 1.2355 holds, the EUR will remain well supported on modest dips and new highs are possible. The 61.8% retracement of the 1.40/1.03 drop stands at 1.2598”.