EUR/USD continues to consolidate after peaking around 1.0980 on Friday. Economists at Scotiabank analyze the pair’s outlook.

Strength to resume above 1.0945/1.0955

Some narrowing in Eurozone/US spreads over the past month and relatively firm European equity market gains relative to US benchmarks suggest some additional upside scope towards 1.1000 may be justified.

Minor losses have not developed into a serious setback for the EUR and price rather appears to be consolidating ahead of a renewed push higher (minor bull wedge pattern). 

Trend oscillators remain bullishly aligned for the EUR across intraday, daily and weekly studies, which should help limit losses (support is 1.0875/1.0885) and encourage further gains. 

Look for EUR strength to resume above 1.0945/1.0955.