The euro (EUR) extended its modest uptrend on Tuesday, rising for the fifth consecutive session, supported by narrowing short-term yield differentials between the eurozone and the United States, according to Scotiabank Chief FX Strategists Shaun Osborne and Eric Theoret.
EUR tests upper 1.16 zone
Scotiabank noted that the single currency’s gains on the crosses are lending additional support, though investors appear hesitant to push the EUR significantly higher ahead of key national and eurozone Q3 GDP releases due Thursday.
“Markets may be reluctant to chase the EUR much higher amid concerns that German data may be weak, following a –0.3% contraction in Q2,” the strategists said.
The analysts added that “the EUR is up for a fifth day on the trot and while gains reflect a rejection of the 1.16 test last week, the lift is marginal and the EUR remains well within recent ranges.”
They highlighted that a sustained move above 1.1665/70 — with the 100-day moving average at 1.1664 aligning with channel resistance from the September peak — could pave the way for additional strength and a retest of the recent high near 1.1728.
