Euro Bullish Trend Targets Upper 1.17s Against US Dollar, Says Scotiabank

Scotiabank analysts said on Tuesday that the euro’s bullish trend is aiming for the upper 1.17s against the US dollar, signaling continued strength for the shared currency.

Scotiabank’s Technical Outlook for EUR/USD

According to Scotiabank’s latest currency analysis, the euro has maintained a constructive technical posture, with the pair pushing higher within an established uptrend. The bank’s strategists note that the EUR/USD pair is now targeting the upper 1.17s, a level that has not been seen in recent trading sessions. The bullish bias is supported by momentum indicators and a series of higher lows on the daily chart, suggesting that buyers remain in control.

Market Drivers Behind the Euro’s Strength

The euro’s appreciation against the dollar comes amid a broader shift in market sentiment, with investors weighing divergent monetary policy expectations between the European Central Bank and the Federal Reserve. Recent economic data from the eurozone has shown resilience, while the US dollar has faced headwinds from expectations of potential rate cuts. Additionally, improving risk appetite in global markets has reduced demand for the safe-haven dollar, further underpinning the euro’s advance.

Key Levels to Watch

Scotiabank identifies the upper 1.17s as the immediate upside target, with a break above this zone potentially opening the door for further gains. On the downside, support is seen around the 1.17 handle, where buyers have previously stepped in. Traders are advised to monitor these levels closely, as a failure to hold above key support could signal a shift in momentum.

Implications for Traders and Investors

For currency traders, the bullish euro trend presents opportunities for long positions, but caution is warranted given the potential for volatility around upcoming economic releases. Investors with exposure to European assets may benefit from a stronger euro, although exporters could face headwinds. The broader market implications include potential impacts on corporate earnings and cross-border investment flows.

Conclusion

Scotiabank’s analysis points to continued euro strength, with the upper 1.17s as the next target against the US dollar. While the bullish trend remains intact, traders should remain vigilant and adapt to changing market conditions. As always, staying informed on central bank policies and economic data will be key to navigating the currency markets.

FAQs

Q1: What is the current EUR/USD forecast from Scotiabank?
Scotiabank expects the euro to continue its bullish trend, targeting the upper 1.17s against the US dollar.

Q2: What factors are driving the euro’s strength?
The euro is supported by resilient eurozone economic data, expectations of Fed rate cuts, and improved risk appetite that reduces demand for the safe-haven dollar.

Q3: What are the key support and resistance levels for EUR/USD?
Immediate resistance is in the upper 1.17s, with support around the 1.17 level. A break above resistance could lead to further gains, while a loss of support might signal a trend reversal.