EUR up modestly, with focus on ECB/Fed outlook - Scotiabank

Euro (EUR) is up 0.2% vs. the US Dollar (USD) and a mid-performer among the G10, extending its recovery from last week's geopolitically-driven pullback, Scotiabank's Chief FX Strategist Shaun Osborne notes.

Market participants eye this week's Fed meeting

"The recovery in risk appetite is important, however the EUR's fundamental underpinnings are critical as market participants eye this week's Fed meeting and its implications for relative central bank policy. "

"A good portion of the EUR's recent rally has been provided by the ECB's ongoing shift toward neutral, and further strength has resulted from a slightly more dovish adjustment in expectations for the Fed. This week's data highlight will be Tuesday's ZEW sentiment figures, along with another heavy week of ECB speaking engagements."

"The trend is bullish, delivering a push to fresh multi-year highs and a break above 1.16. The RSI is confirming and showing renewed bullish momentum, climbing toward the mid 60s while still offering some room for gains ahead of the overbought threshold closer to 70. The 50 day MA (1.1332) remains an important medium-term support level. The near-term range is likely to be bound between 1.1500 support and 1.1650 resistance."