EUR/USD: firm resistance above 1.1075 - Scotiabank

Shaun Osborne, FX Strategist at Scotiabank noted that EUR/USD bias remains neutral to bearishm in the short-term as the market chop around 1.11, with intraday signals suggesting firm resistance above 1.1075.

Key Quotes

The EUR remains relatively soft in the context of recent ranges but markets remain reluctant to lean too hard on the market. Eurozone-US spreads (133bps at the 2Y sector) remain widely in the USD’s favour and Eurozone banks continue to underperform. Both point to, we think, a lower EUR.

“Investors may be shying away from betting too heavily on the USD until the domestic political situation clears. Note that the Republican National Convention starts today. “

“EURUSD short-term technicals: neutral/bearish—We retain neutral/bearish view of technical prospects here because a) spot remains below the base of the rising channel that had developed since the early December low below 1.06; this suggests the market will move lower in the medium term. Short-term trends look neutral as the market chop around 1.11. Intraday price signals are a little soft, however, and suggest firm resistance above 1.1070/75.”