The EUR/USD currency pair is currently consolidating above 1.11, following three days of solid gains that have brought the pair to its highest level since December. This observation comes from Scotiabank’s Chief FX Strategist Shaun Osborne. According to Osborne, a push above the 1.1140/50 level could lead to a test of the low 1.12s.
With no major data reports released today, the focus shifts to tomorrow’s Eurozone negotiated wages data for the second quarter, which could potentially offer some insight into the risks surrounding ECB policy. The current spot price is hovering just below minor resistance at 1.1140, which was last seen in December. Osborne points out that the intraday and daily oscillator signals are showing signs of being overextended, suggesting a potential pause in the recent bullish momentum of the EUR in the near future.
Despite these signals, Osborne believes that any minor dips to the mid to upper 1.10s should find strong support. If the pair manages to break above the 1.1140/50 resistance level, the next target would be a drop to the low 1.12s. This indicates that there is still potential for further upward movement in the EUR/USD pair.
Overall, the EUR/USD pair is currently in a consolidation phase, with a potential for further gains if it manages to break above the 1.1140/50 resistance level. Traders will be keeping an eye on tomorrow’s Eurozone negotiated wages data for more clarity on ECB policy risks. Despite stretched oscillator signals, minor dips in the mid to upper 1.10s are expected to find support, with a possible target of the low 1.12s if the pair breaks above 1.1140/50.
