EUR/USD: Chance to squeeze a little higher - Scotiabank

The European Commission's economic outlook anticipates a pick up in the region's economy this year and next as consumer demand and business investment pick up, Scotiabank's Chief FX Strategist Shaun Osborne notes.

EUR finds support near 1.05

"Growth is expected to reach 1.3% in 2025 and 1.6% in 2026--a little better than recent assumptions. Growth in the core Eurozone economies may lag somewhat versus the larger, more peripheral countries, however. The report does not factor in risks emerging from the recent US election; trade frictions would be a significant impediment to the German economy especially."

"Yield and fundamental headwinds for the EUR are poised to remain substantial for the foreseeable future. The short-term chart is showing some--mildly--positive signs for the EUR. A squeeze higher in the EUR in yesterday's session from the 1.05 area (now support) may have put in a short-term low for spot via a bullish outside range signal on the 6-hour chart."

"Oversold oscillators are trying to correct as well, which could help lift the EUR in the short run. A deeper rebound requires the EUR to push through 1.0585 resistance: above here targets 1.0650/60."