EUR/USD: Undertone remains soft – Scotiabank

FXStreet Insights Team FXStreet

EUR/USD edged below 1.09 briefly overnight behind broader USD strength. EUR short-covering plus a stronger than expected ZEW Expectations reading for October lifted spot slightly, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

EUR recovers from sub-1,09 levels

“The investor sentiment index nudged up to 13.1, form 3.6 in September, above consensus expectations for a rise to 10. The news is only somewhat positive for the EUR as firmer sentiment is being supported by investor hopes for quicker ECB rate cuts.

“The broader bear trend in EUR/USD remains well-entrenched on the short-term chart but intraday price action is reflecting some demand for the EUR on dips below 1.09, with two bull “hammer” signals developing around the lows over the past 24 hours.”

“EUR faces minor resistance at 1.0925 on the hourly chart and will need to push above that point this morning to extend the rebound to the mid/upper-1.09s. Broader technical patterns continue to point to a decline to the 1.08 area, however, so markets will likely took to fade modest EUR gains below 1.10.”

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FXStreet Insights Team

FXStreet

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