EUR/USD points south near term – Scotiabank

Eric Theoret, FX Strategist at Scotiabank, believes the pair risks a test of the 1.1200 handle in the short term.

Key Quotes

“EUR is attempting a decisive break below 1.13, softening toward Monday’s low. Fundamental releases have been limited to as-expected final GDP figures from Germany—0.4% QoQ. Yield spreads are a drag for EUR, the 2Y Germany-U.S. spread widening toward -140bpts to levels last seen in early June”.

“EUR is softening toward Monday’s low, testing the 9 day MA (1.1278) with risk to 1.1250 and the 21 day MA around 1.12 (see middle chart). Bullish momentum signals are moderating and DMI’s hint to a shift in the balance of risk. We look to resistance above 1.1320”.