Economists at Scotiabank do note that technical signals hint at a potentially positive outlook for the EUR/USD. The pair could surge towards 1.05/06 on a break past 1.0380/85.

Techs lean bullish

“EUR/USD renewed buying pressure through early European trade has built a solid, short-term base around 1.0275 (40-day MA and former resistance, now support) for a renewed attack on yesterday’s high just under 1.0370 (May and June lows at 1.0360, therefore resistance).”

“Spot is nearing the top of the bear channel in place since Feb (1.0380/85); a breakout should confer more strength on the EUR and prompt a rise to 1.05/1.06.”