EUR/USD: Consolidating ahead of another push lower – Scotiabank

EUR’s rebound extends through low-1.07s. However, economists at Scotiabank do not expect the EUR/USD pair to extend its race higher.

Resistance should be firm at 1.0790/00

“We are not fully convinced the EUR rebound has staying power. Risk reversal pricing suggests markets bets are tilting towards renewed weakness in the near term, with 1m EUR risk reversal pricing slipping to -0.89%, reflecting relative higher demand for EUR puts over calls.”

“Trend signals are not aligned in a way that gives me confidence that the rally can extend much more at the moment and spot may simply be consolidating ahead of another push lower; resistance should be firm at 1.0790/00.” 

“Intraday losses below 1.0730 will likely see renewed softness towards or below the figure.”