EUR/USD remains at risk of a drop through 1.0700 and further losses toward 1.0600 – Scotiabank

EUR/USD traded in a tight range, consolidating recent losses through the low 1.0700s. Economists at Scotiabank analyze the pair’s outlook.

Minor gains attract selling

EUR losses have stalled in the low 1.0700 area; markets appear willing to jump on minor EUR gains to add to short positions at the moment but spot losses have remained contained to the 1.0725 area again.

Retracement support (61.8% of the EUR’s Q4 rally) sits just below the market at 1.0712. 

Trend dynamics are bearish on the short-term studies which suggests the EUR remains at risk of a drop through 1.0700 and further losses toward 1.0600.

Minor relief may come if spot can regain 1.0770.