Euro: Decline nears support zone against US Dollar – Scotiabank

EUR/USD: mildly bearish, but downside may be crowded near support. Scotiabank’s view points to continued pressure from widening front-end rate spreads and concerns about a possible US diesel-export ban. If those spreads reflect a stronger relative US rate outlook, they favor the dollar; energy-supply concerns could also weigh on the euro through risks to European growth and costs. The US has reportedly denied pursuing a ban, so that risk may fade without follow-through.

The counterpoint is technical: losses look extended, with Scotiabank identifying 1.1325–1.1350 as firmer support where value buying could slow the decline or prompt a rebound. Improving German IFO readings offer some growth support, though the article cautions that sentiment has not reliably tracked GDP. A decisive break below support would strengthen the bearish interpretation; a hold would make consolidation or a corrective bounce more plausible. Traders should watch rate-spread moves, energy-policy developments, and whether German activity data confirm the improvement in sentiment.