The Euro (EUR) is extending gains in early trade, rising more than 1% on the day, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

EUR outperforms on the day

“After steadying late last week following a test of the mid-1.02 area, EUR gains are pushing on strongly today. Final Eurozone Composite and Services PMI data were revised higher for December on solid upgrades to both French and German reports.”

“Initial German state CPI for December are coming in hotter than forecast, meanwhile, adding to EUR support as markets trim ECB easing bets. EURUSD could push on to the 1.0500/50 range.”

“Solid EUR gains on the intraday and daily charts today suggest a little more upside potential in the EUR in the short run at least. Chart signals are not obviously bullish and the broader downtrend persists. But an oversold EUR might be able to extend gains through 1.0460 resistance to test stronger technical resistance at 1.0500/50. Support is 1.0375.”