EUR/USD holds in tight range around the 1.10 level. Economists at Scotiabank analyze the pair’s outlook.

The outlook for the EUR remains positive in the longer run 

The outlook for the EUR remains positive in the longer run but recent positioning/sentiment data has highlighted the fact that the long EUR trade is already a little crowded which may be retraining the EUR’s ability to advance without stronger incentives.

Technical pointers provide some conflicting signals for the EUR. The short-term pattern of trade looks bearish after the EUR’s strong reversal from the intraday high on Thursday. However, losses failed to develop in a meaningful way, with spot still (relatively) well-supported against rising trend and MA support in around 1.0925.