EUR/USD to suffer further downward pressure below the 1.05 area – Scotiabank

EUR/USD ends its six-day losing streak. However, economists at Scotiabank note that the pair is in a bearish trend and expect more dowside ahead.

Clear risk of a re-test of the 1.05 zone and Thursday’s 1.0472 low

“Weak growth, continued risks surrounding energy supply, and exhausted ECB hike bets point to more downside than upside risks for the EUR over the coming months.”

“After closing just under 1.05 yesterday, the EUR strengthened to as high as the 1.0590/00 resistance zone that should continue to act as a strong ceiling during today’s session.”

“Downward pressure could face support at the mid-1.05s but the EUR’s steep bearish trend suggests it is at clear risk of a re-test of the figure zone and yesterday’s 1.0472 low; no obvious support markers come in until the early 2017 low of 1.0341.”