EUR/USD points to a test of 1.2450/1.2550 – Scotiabank

FX Strategists at Scotiabank believe the pair could re-visit the 1.2450/1.2550 band in the next weeks.

Key Quotes

“Eurozone data reflected a modest drop in unemployment rate for the region overall (8.5% in Feb, the lowest since the financial crisis) and a gain in headline CPI for Mar (1.4% in headline terms, from a revised 1.1% in Jan). Data were in line with market expectations and had little impact on price action which was dictated mainly by the Chinese tariff news and the subsequent market fall out. We remain constructive on the overall outlook for the EUR and feel that EUR softness towards the 1.22 area should remain well-supported as the broader range trade in place for much of the year so far remains intact”.

“Short-term price action still looks a little heavy for the EUR; intraday selling from the low 1.23 area has likely put a ceiling on the market in the near-term and may see the EUR edge back to the 1.2250/60 area. We still rather feel that the past few weeks’ worth of movement in the market represents a large consolidation after the late 2017/early 2018 rally, however, and look for the EURA to remain well-underpinned on dips for a return towards 1.2450/1.2550 in the next few weeks”.