According to Scotiabank strategists Shaun Osborne and Eric Theoret, the Euro (EUR) is currently consolidating in a tight range around the mid-1.15s against the US Dollar (USD) as markets await the outcome of the Federal Open Market Committee (FOMC) meeting [1]. Eurozone July Industrial Production fell by 0.1% month-on-month, which was slightly better than the forecasted 0.2% decline; however, this data had no discernible impact on Euro sentiment [1].
Implied volatility in the overnight EUR market has increased modestly, with a breakeven move in spot of about 50 pips, which is below recent peaks. This suggests that markets may have already priced in a hawkish outcome from the Fed [1].
From a technical perspective, Scotiabank notes that the EUR/USD pair is experiencing a pause in its recent softness, but short-term price patterns indicate the potential for renewed losses. If the Euro weakens below the 1.1515/20 support level, it could target further declines toward the 1.1450–1.1475 area, while resistance is seen at 1.1565/75 [1].
CONCLUSION
The Euro is consolidating with downside risks as markets await the FOMC decision, and technical analysis points to potential further declines if key support levels are breached. Market sentiment remains neutral to bearish, with modest volatility suggesting expectations for a hawkish Fed outcome are largely priced in.