Push through 1.0560 should allow a retest of 1.06+ – Scotiabank

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EUR/USD rebounds on firmer than expected ZEW survey results. Economists at Scotiabank analyze the pair’s outlook.

Firm support on dips to the 1.0500 area

Germany’s ZEW survey for October delivered better-than-expected results. The current assessment reading softened – but less than expected – to 79.9 (from 79.4 last month) while the expectations component improved to -1.1 (from -11.4), also better than forecast. The data suggest clear improvement in sentiment as the ECB rate cycle (likely) peaks. This may be a prelude to a slightly better economic performance.

Intraday EUR gains have been capped around 1.0560/1.0565 resistance again but a firm close on Monday tilts technical risks towards a bit more pressure on the upper 1.05s and firm support on EUR dips to the 1.0500 area. 

A push through 1.0560 should allow the EUR to retest 1.06+.