EUR baulks at pushing through 1.0590 resistance – Scotiabank

A rebound in French markets following this week’s political turmoil has done little for the EUR, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

Spot remains well-supported near the highs

“Markets note Eurozone wage growth eased in Q3, giving the ECB policy hawks a path to support a 25bps rate cut next Thursday. A 1/4-point rate ease is fully priced in (swaps reflect around 26bps of anticipated easing).”

“December seasonals for the EUR are strongly positive, however, and declining political risk should give the EUR an opportunity to stabilize or firm a little more in the short run. The EUR rose to challenge short-term resistance and potential bull break out trigger at 1.0590 yesterday but failed to push on.”

“Spot remains well-supported near the highs this morning and price signals continue to lean bullish on the short-term chart as bullish trend momentum strengthens a little. A push above 1.0590/00, which could drive a squeeze to the mid/ upper 1.06s, at least, needs to come soon though. Support is 1.0515/20.”