EUR steady ahead of ECB and PMI's - Scotiabank

The Euro (EUR) is steady, up a marginal 0.1% as it shows signs of continued stabilization around 1.16, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

The multi-month trend remains bullish

"All eyes are on this week's ECB meeting, despite a widely expected hold, as market participants look to policymakers' latest assessment of the outlook for rates. Recent communication has been broadly neutral however the short-term rates market continues to price at least one more 25bpt rate cut by year end."

"Thursday's preliminary PMI's are expected to show marginal contraction in manufacturing and a marginal expansion in services. On trade, developments have been limited and talks are ongoing with media reporting that EU officials may be willing to accept an unbalanced agreement."

"The RSI is hovering around 50, reflecting the latest consolidation around 1.16. The multi-month trend remains bullish but the loss of momentum is notable. We continue to highlight the importance of mediumterm support around the 50 day MA (1.1510) and look to a near-term range bound between 1.1550 support and 1.1680 resistance."