Euro: Support seen near 1.15 against US Dollar – Scotiabank

EUR/USD: mildly bearish near term, but 1.1500 is the key downside test.

Scotiabank’s assessment is more a technical and positioning warning than a fresh fundamental catalyst. EUR/USD is under pressure from broad US-dollar demand and risk aversion, while momentum has deteriorated after the pair fell toward its 50-day moving average near 1.1531. That favors continued downside probing, particularly if market sentiment remains defensive.

The 1.1500 area is strategically important: a sustained hold could attract dip-buying and produce a rebound toward the 1.1630–1.1650 region, where yield-spread valuation and near-term resistance are concentrated. A decisive break below 1.1500, however, would weaken the technical structure and likely encourage further euro liquidation, especially if accompanied by rising US yields or a stronger Dollar Index.

The fundamental picture is mixed. Relative German-US two-year yields imply fair value near 1.1633, suggesting that the current decline may have pushed EUR/USD below what rate differentials alone would justify. However, risk aversion is currently overriding that support, and higher energy prices are creating a difficult policy mix for the ECB: they may prompt more hawkish inflation rhetoric while simultaneously damaging European growth expectations.

Trading implication:

the immediate bias is neutral-to-bearish, with 1.1500 acting as the pivotal level rather than an automatic reversal point. A rebound would need improving risk appetite, softer US yields, or stronger-than-expected European data. The main catalysts to monitor are the September 15, 2026 ZEW survey, US rate expectations, Treasury yields, energy prices, and further ECB commentary. A weak ZEW result or renewed risk-off flows would increase the probability of a break below support; a resilient survey and stable yields would improve the odds of stabilization.