FX Strategists at Scotiabank keep their bearish outlook on the pair unchanged in the near term.
“Investors continue to shed EUR long positions as the cost of carrying USD shorts versus lower yielding currencies becomes even more punishing in the absence of gains in the underlying position. For USD-based investors, the cost of holding a short position versus the EUR amounts to 290 pips (3m hedged annualized). Most mainland European markets are closed today, robbing the spot market of liquidity but the EUR is looking soft and prone to more losses as the market nears psychological support around the 1.20 mark”.
“Volumes are light but the damage to the short-term chart is hard to ignore as EURUSD slides to new cycle lows, pushing below the low seen through Friday’s (bullish) session and pressures longer run consolidation support in the 1.2030 zone. Trend momentum is bearish, but looking somewhat over extended on the short-term charts. There is little, obvious support below the 1.20 until 1.1918, the Jan low”.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.