EUR/USD to enjoy further gains on a break above daily high of 1.1160 – Scotiabank

The EUR/USD has started out the week strongly, rebounding from its close below 1.10 on Friday. Economists at Scotiabank highlight that the daily high of 1.1160 is key resistance.

ECB rate hike expectations are excessive

“With markets now expecting over 100bps in ECB hikes twelve months from now, we think EUR downside risks are building as the bank will have to temper expectations.”

“EUR’s decline under 1.11 yesterday stopped short at ~1.1070/75, which stands as intraday support after the figure.

“Daily high of 1.1160/65 is key resistance. The 50-day MA, which it hasn’t touched since late-Feb, follows as resistance at 1.1184 before the big figure.”