June 3, 2023

EUR/USD support and resistance levels (on the way to 1.10)

A snippet from a note via Scotia on the euro.

Analysts at the bank expects its more likely for the Federal Reserve to hike by 100bps this year than it is for the European Central Bank to hike by even 10bps (and order of magnitude difference). This is a driver of Scotia’s view of EUR/USD to 1.10.

Further on the rate path ahead, they add:

  • OIS markets penciling a first ECB increase in October
  • The 50bps in rate increases that markets are seeing by end-2023 would be a sharp turnaround from the ultra-dovish ECB.

On support and resistance levels ahead:

  • Support ~1.1270/85 followed by 1.1260 and 1/1235/40.
  • Key resistance the 50-day MA at 1.1351 and the recent high of 1.1386

eurusd chart 10 January 2022 daily

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