EUR/USD: staying bearish despite rally through 1.0700 - Scotiabank

Analysts at Scotiabank explained that the EUR has advanced through the low 1.07 area that capped the market last week.

Key Quotes:

"But the advance is not especially convincing and continues to reflect position adjustment rather than a fundamental change in view on the USD. 

The Fed’s growing confidence in the economy contrasts with the clearly dovish messaging from ECB President Draghi last week and, with short-term rate spreads a little narrower, but still within recent ranges, we see little scope for the EUR to gain significantly from here. 

We remain bearish on the EUR and continue to view current levels as “rich” relative to fundamentals."