Outlook on EUR/USD appears neutral/bearish – Scotiabank
|In view of FX Strategists at Scotiabank, the pair’s stance remains tilted to the neutral/bearish side in the short-term horizon.
Key Quotes
“EUR is quietly consolidating Wednesday’s decline and entering Thursday’s NA session with a modest gain following a recovery from a short-lived drop below 1.15. EUR remains vulnerable in the context of fading ECB rate expectations and ongoing Italian budget concerns. Italian 10Y yields are up roughly 20bpts from Wednesday’s low, pushing Bund spreads above 310bpts to levels last seen in 2013”.
“Momentum indicators are modestly bearish and the DMI’s are confirming. Wednesday’s decline broke several key support levels, most importantly the 1.1490 level corresponding to the October 9 hammer doji. Near-term support appears limited ahead of the mid-1.14s and the October 9 hammer low. Near-term resistance is expected at 1.1550”.
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