The Euro (EUR) is quietly consolidating in the low 1.17s and extending this week’s narrow range, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Markets await catalyst w/ relief on trade/tariffs

"Germany’s final CPI was released in line with expectations, printing 2.0% y/y, and France will release its final CPI figures on Friday. The week has been relatively quiet from a fundamental perspective, as markets have looked to trade talks between the US and EU and found reassurance in the tone of negotiations and Europe’s avoidance of a tariff letter from the US."

"ECB commentary has been neutral, pushing back of calls for rate cuts, however market pricing continues to lean toward easing (~23bpts by year end). Yield spreads have once again turned supportive for the EUR as US yields have pulled back from their recent highs."

"The multi-month trend remains bullish but the EUR’s latest consolidation has delivered a considerable loss of momentum. The RSI has pulled back from its recent overbought highs in the mid 70s and is currently hovering just above 60. We continue to highlight the importance of the 50 day MA (1.1459) as an important level of medium-term support. We see the near-term range bound between 1.1680 support and 1.1780 resistance."