EUR/USD bearish bias still firm – Scotiabank

Chief FX Strategist at Scotiabank Shaun Osborne has noted the bearish prospects for the pair in the near term.

Key Quotes

“Broadly, the EUR remains weighed down by the still evolving asymmetric growth and diverging monetary policy story that we think recent developments (Brexit, improving growth trends in the US through Q2) have done nothing but embellish. We look for losses to extend to retest the recent 1.0915 low shortly”.

“We remain broadly bearish on EURUSD’s prospects. The intraday pattern of trade does suggest, however, that near-term risks are tilted very slightly higher as a minor, inverse H&S appears to have formed around the overnight low near 1.0950/55”.

“Upside risks extend to the low 1.10 area only, we expect, which is likely to attract renewed selling interest. Broader price patterns are negative (break under 2016 consolidation range base near 1.12) and trend strength oscillators are aligned bearishly across a range of timeframes, suggesting limited and only short-lived scope for the EUR to mount counter-trend rallies. We target a near-term drop to test 1.0915 support and look for a test of the 2015 low (1.0464) below there”.