Euro Stalls Near 1.1550 Resistance Amid Central Bank Expectations

The Euro has stalled near its resistance level of 1.1550 against the US Dollar, according to Scotiabank. The EUR/USD exchange rate has been slightly softer after touching levels last seen in mid-June.

Fundamentals remain supportive as yield spreads turn, with spot EUR having nearly converged with Scotiabank's fair value based on the 2-year Germany, US spread. This estimate stands at 1.1538.

Further gains for the Euro will likely require a shift in relative central bank expectations or an improvement in sentiment. Risk reversals reveal a continued premium for protection against EUR weakness, indicating that investors remain cautious about the currency's prospects.