EUR/USD scope for a test of 1.21/1.22 – Scotiabank

FX Strategists at Scotiabank remain constructive on spot, seeing the likeliness of a visit to the 1.21/1.22 area.

Key Quotes

“Reuters reported yesterday that some ECB policy makers were worried about EUR strength but Gov. Nowotny commented today that the EUR rise should not be “over dramatized”, allowing spot to push back to the low 1.19s. We concur and note the EUR is currently trading close to its 20Y average and lifetime average”.  

“EURUSD is trading more or less unchanged on the week, despite some sharp swings in the past few sessions. After the steady gains through mid-year, the EUR rally may be starting to tire somewhat in a broader sense. However, intraday patterns suggest that the remains well-supported on dips and we think the broader rally risks extending a little more (1.21/1.22) before consolidating more meaningfully”.