Eurozone Data Fails to Boost Euro Gains Amid Expected Rate Hike

According to Brown Brothers Harriman's (BBH) Elias Haddad, leading indicators in the Eurozone point to an economic recovery. The PMI and ZEW index have both shown increases, while Germany's IFO business climate index rose to 86.6 in July from 85.7 in June.

The improving data reinforce the case for the European Central Bank (ECB) to resume raising rates in September, Haddad notes. However, he argues that already-priced tightening and nearby technical resistance may limit further upside for the Euro.

As a result, Haddad does not expect significant gains for the EUR/USD pair, citing 90% odds of a 25bps rate hike at the September 10 meeting as priced in by the swaps curve. The next key resistance for EUR/USD is at 1.1483, while support is at 1.1335.