EUR/USD now looks to 1.2598 – Scotiabank

FX Strategists at Scotiabank remain bullish on the pair, while the vicinity of the 1.2600 handle has come under renewed attention.

Key Quotes

“Near-term risk lies with the U.S. employment figures and their impact on the broader USD, however we continue to highlight EUR’s sensitivity to headline risk relating to the outlook for ECB policy. Thursday’s comments from ECB GC member and Chief Economist Praet stressed the need for data-dependence as he characterized inflation developments as ‘subdued’. The growing prospect of a ‘short taper’ should weigh on ECB rate expectations”.

“Momentum signals are bullish and in overbought territory. DMI’s are confirming and trend strength is rising. We await a break of the one week range roughly bound between the mid-1.23s and the mid-1.25s, and we highlight the importance of 1.2598 representing the 61.8% retracement of the 2014-2017 decline”.