Euro: Bullish Trend Targets Above 1.17 Against Dollar – Scotiabank

EUR/USD is currently trading near 1.16776, with the short-term technical outlook maintaining a bullish stance. Scotiabank strategists Shaun Osborne and Eric Theoret noted in their latest report that the recent gains in EUR/USD have been primarily driven by broad dollar weakness, with front-end spreads continuing to narrow since late June, providing fundamental support for the euro.

**Short-Term Target and Key Levels**

Scotiabank maintains its short-term target for EUR/USD to break above the 1.1625/50 range, and if a valid breakout occurs, the pair could further advance toward the mid-1.17 region. The bank believes both intraday and daily momentum are strong, with support seen at the 1.1515/25 level. Market reports indicate that the euro previously touched a high of 1.17 this week, but further upside will require new catalysts.

**Fundamental Drivers**

From a spread perspective, the narrowing of front-end spreads is one of the key variables supporting the euro. Scotiabank strategists emphasized in the report that broad dollar weakness is the primary force driving EUR/USD higher, rather than independent strength in the euro itself. This implies that the subsequent trajectory of EUR/USD will largely depend on the overall direction of the U.S. dollar index.

**Outlook**

If EUR/USD holds above 1.1625/50, Scotiabank sees the mid-1.17 region as a near-term achievable target, and with fresh upside momentum on the daily chart, the 1.18 area could also come into view. However, in the absence of new catalysts, the euro may continue to consolidate and build momentum within the 1.16-1.17 range. Overall, the bank holds a constructive view on the euro's short-term prospects, but the pace of upside still depends on the alignment of dollar movements and spread changes.