EUR/USD has held in a sideways consolidation range for much of the week. Economists at Scotiabank expect the pair to test levels above 1.10.

Hawkish policy prospects will underpin the EUR

“We expect the ECB to lift rates 50 bps in Feb and March at least and do not exclude a third 50 bps increase in May. Hawkish policy prospects will underpin the EUR.”

“Spot has met better selling pressure on gains through the upper 1.08s but the pattern of trade plus solidly bullish trend strength signals really suggest that new highs and a push on to 1.10+ are a matter of time.”

“Support is 1.0775. Resistance is 1.0890/00.”