EUR/USD neutral/bullish near term – Scotiabank

FX Strategists at Scotiabank noted the pair will look to the ECB for a clear direction in the short term.

Key Quotes

“Germany’s IFO business confidence survey reached a record 116.7 in Oct (market expected a small dip to 115.1, from 115.3 in Sep) but the EUR barely flinched as President Draghi’s press conference tomorrow is awaited. Markets are looking for guidance on how the ECB’s asset purchase program will extend into 2018 (the pace of buying likely to slow to EUR20-40bn/month, from EUR60bn currently, for a finite period). Extremely narrow range trading over the past week—and low realized vol—perhaps suggest that this market is prone to a more dynamic phase of market movement shortly”.

“Spot looks well-supported in the low 1.17s still, even if there is an evident reluctance to extend gains through the upper 1.17s at the moment. Broader market trends are finely balance and will be driven by either the loss of support in the 1.1675 area or gains through 1.1835”.