EUR/USD’s bounce tests 1.1665 key resistance. Above here, the world’s most popular currency pair would move to the mid-1.17s but ECB policymakers stay dovish, limiting euro’s upside potential, economists at Scotiabank report.

ECB members remark the cautious stance of the policy guidance

“ECB’s Rehn and Villeroy were speaking earlier and both senior policymakers reiterated the ECB’s dovish policy outlook. The broader dovishness among ECB policymakers gives us little confidence that the EUR rally will extend significantly in the near to medium term.”

“The EUR/USD rally has extended to retest 1.1665 resistance so it will be pivotal in determining whether this EUR rebound extends or starts to fizzle out.”

“A push above 1.1665 will drive the EUR on to the mid-1.17s.”