FX Strategist at Scotiabank Eric Theoret argued the pair’s stance remains neutral while support is expected between 1.1750/1.1720.
“EUR is soft, threatening the lower end of its two week range around 1.18. Stronger than expected German factory orders failed to provide support and EUR appears to have disregarded constructive comments from the ECB’s Mersch as he spoke of the need for a ‘credible perspective of an exit’ from policy accommodation. Spreads are showing signs of stabilization and risk reversals hint to a moderation in the premium for protection against EUR strength”.
“EUR appears vulnerable threatening recent support in the lower 1.18 area. Momentum signals are neutral and trend strength is muted. Near-term support is expected between 1.1750 and 1.1720. Resistance is expected above 1.1880”.
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