EUR/USD set to rally toward the upper 1.13s/low 1.14s in the next few weeks – Scotiabank

EUR/USD gains on short-covering and approaches 1.1300. As economists at Scotiabank note, December seasonal trends are bullish. Subsequently, the pair could race higher to the upper 1.13s/low 1.14s in the next few weeks.

EUR/USD is poised to close out the week on a bullish note

“The EUR is one of the better performers on the session but this probably reflects positioning – short-covering – rather than any particular reassessment of the EUR’s outlook.”  

“The squeeze higher will serve to relieve the oversold condition on the shorter-term studies and we reiterate that seasonal trends do tend to be more USD-negative in December – the month that has delivered the strongest gain on average (+1.2%) for the EUR in the past 25 years.”

“A decent squeeze on EUR shorts could see spot rally to the upper 1.13s/low 1.14s in the next few weeks.”