EUR/USD shows underlying resilience, supported on moderate dips for now – Scotiabank

EUR/USD holds range after Eurozone data shows inflation slowing in November. Economists at Scotiabank note that the pair is likely to remain resilient after recent price action.

EUR/USD to remain better supported on moderate dips for now

“Slower headline prices might provide ECB policymakers with the grounds for a slowdown in the pace of tightening – to 50bps – in Dec markets seem to be thinking but double-digit prices and stubborn core inflation will still likely worry the hawks. We look for EUR/USD to remain better supported on moderate dips for now.” 

“The EUR is managing to hold in a relatively tight range around 1.0350 despite the negative price action seen earlier in the week (big, bearish rejection of the 200-day MA). That is no mean feat and suggests some underlying resilience in the EUR at this point.” 

“We spot intraday support at 1.0320, firmer at 1.0240/50. Resistance is 1.0380 and (strong) at 1.0500/10.”

See: ECB to raise interest rates by only 50 bps in December after a decline in Eurozone inflation – Commerzbank