EUR soft as markets await German/France CPI Thursday/Friday - Scotiabank

The Euro (EUR) is soft and entering Wednesday's NA session marginally lower against the US Dollar (USD), hovering just above the 1.17 level at which it has found support so far this week, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret note.

Yield spreads stabilize & offer support

"There have been no major data releases, as we await the release of CPI data from Germany (Thursday) and France (Friday). Comments from ECB GC member Vujcic have been neutral, pushing to keep rates unchanged despite some lingering concerns about the ECB's near-term below-target forecast."

"Interest rate differentials appear to be offering the EUR some support following their recent pullback, as US yields have settled following their post-NFP surge. Finally, trade developments remain a positive for the EUR as US/EU trade talks continue."

"The multi-month trend remains bullish but the latest pullback is notable and has dragged momentum down from its recent overbought levels. We remain bulls above 1.15 and the 50 day MA (1.1450), the latter representing an important source of medium-term support in the recent rally. We look to near-term support in the 1.1650/1.1680 area and see resistance above 1.1780."