EUR/USD is slightly firmer, with spot pricing marked up in a reflection of the generally soft tone of the USD, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

Scope for gains remains limited ahead of ECB Thursday

“The Euro (EUR) is unlikely to shine ahead of Thursday’s ECB policy decision. A 25bps rate cut is expected and fully priced in but the outlook for rates that is perhaps more important for the near-term direction of rates. Markets are pricing in 64bps of total easing between now and the end of the year. That is a little quicker than the one cut per quarter pace that the ECB seems to be operating on.”

“Intraday price action suggests a low/ reversal formed around this week’s 1.1015 low (bullish “morning star” pattern on the 6- hour chart). But gains have stalled in the mid-1.10s and short-term trend momentum signals are still reading bearish for the EUR. Gains through 1.1070/75 would give the EUR a little more intraday momentum. Key short-term support is 1.1015 now.”