EUR/USD trades softer below 1.10. Economists at Scotiabank analyze the pair’s outlook.

Too soon to sound the all-clear on ECB rate hikes

Tight labour markets risk keeping wage growth elevated and ECB policymakers will have to stay on their toes for the foreseeable future. It remains too soon to sound the all-clear on ECB rate hikes, even if the bar to more tightening is a little higher after last week’s decision.

The EUR looks soft below 1.10 and, after a couple of tests and failures at 1.1045/50 over the past few sessions, losses back under the figure area have tilted risks towards some drift – but perhaps not that much. 

Support is 1.0950. Resistance is 1.1010/15.