According to FX Strategists at Scotiabank, the pair faces no relevant support between 1.1820 and 1.1720.
“EUR is weak, extending Monday’s bearish reversal with a break back below 1.19. The latest deluge of fundamental releases has been mixed, with stronger CPI from France and weaker GDP from Germany. Euro area industrial production also disappointed. Interest rate differentials appear to be showing some signs of stabilization on the back of rising German yields, however positioning adjustments remain a critical near-term consideration given extended/near-record bullish speculative EUR longs. Risk reversals are also showing a modest premium for protection against EUR weakness”.
“Monday’s daily candle is suggestive of a decisive turn following a remarkably muted rally from last week’s low around 1.1820. The latest break of 1.19 has been remarkably swift and near-term support appears limited between 1.1880 and 1.1850. We also note the absence of any meaningful support between 1.1820 and the mid-December low around 1.1720”.
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