The Euro (EUR) is trading flat vs. the US Dollar (USD) and consolidating around 1.11 into Tuesday’s NA session, Scotiabank’s Chief FX Strategist Shaun Osborne notes.
Euro remains vulnerable to Fed/ECB divergence
“Market participants showed little reaction to the mixed ZEW investor sentiment data out of Germany, as the expectations sub-component offered a modest surprise while the current situation subindex delivered a minor disappointment.”
“The ZEW figures were the weekly data highlight for Europe and focus will now shift to the ECB, where policymakers appear to be maintaining a bias to easing, creating a stark contrast to the neutral, ‘patient’ messaging from the Fed.”
“EUR/USD’s RSI has drifted below 50, into bearish territory. The 50 day MA (1.1084) appears to be offering modest support, however meaningful support is not expected above the psychologically important 1.10 level and the mid-March highs around 1.0950.”
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