EUR/USD near term outlook stays bearish – Scotiabank

The near term stance on EUR/USD remains on the bearish side, suggested FX Strategist at Scotiabank Eric Theoret.

Key Quotes

“Yield spreads remain bearish for EUR with -200bpt differentials at both the short and the longer end of the curve. Political risk should prove an added weight for EUR into next month’s French election, and we highlight the sizeable premium for protection against downside risk with the one month risk reversal pushing to levels last seen in Brexit”.

“EUR has tested a fresh, marginal post-Fed low under 1.0650 however it has yet to resolve the four-session consolidation in the mid-upper 1.06s. Momentum indicators are bearish and the 9 day MA has crossed below the 21 day MA. We look to a break of the 100 day MA at 1.0624 with risk to the March 15 open at 1.06”.