EUR soft but off lows – Scotiabank

Inflation data from France showed unchanged prices on the February month (versus expectations of a 0.2% rise) while German regional CPI data support forecasts for steady to slightly lower German CPI data, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

French, regional German data suggest CPI moderation

"Moderating inflation trends underpin expectations for a 25bps ECB rate cut at the March 6th meeting. Trade/ tariff concerns continue to weigh on the EUR outlook, driving a deeper divergence with my estimated spot fair value of 1.0687, driven by improving real yields and significantly superior EZ equity market returns." 

"Range parameters are being defined by the 100-day MA at 1.0517 and the 40-day MA at 1.0392 currently. Trend momentum signals are not especially strong on the intraday and daily oscillators, suggesting range trading may extend." 

"But short-term price action does lean a little more bearish after repeated EUR failures in the low 1.05 zone this month and the loss of support in the low 1.04 zone, however. Risks may be tilted towards a push to 1.02 in the short run."