EUR/USD continues to pivot in a tight range between 1.13-1.14. In the view of economists at Scotiabank, the European Central Bank's (ECB) slow pace of normalization could drag the pair down to the 1.10 level.

Long-run oscillators remain bearish

“Short and medium-term trend oscillators are flat – suggesting a continuation of the choppy range trade for now. Longer-run oscillators remain bearish, however, and we think this continue to imply resistance to EUR gains above 1.14 and very firm resistance at 1.15 in the weeks ahead.” 

“We think the ECB’s slow course towards monetary policy normalization leaves the EUR prone to softness in the medium-term (and continue to target a year-end rate of 1.10 versus the USD).”