EUR/USD: Risks tilted toward a drop back to the 1.0700/1.0800 range – Scotiabank

EUR/USD losses steady in the upper 1.08s. Economists at Scotiabank analyze the pair’s outlook.

More corrective losses are ahead

Bear trend momentum on the intraday and daily DMI oscillators is picking up but the lack of follow through selling on the EUR today so far may delay a deeper sell-off in the short run. 

Weakness below trend support – now resistance – at 1.0930 on Tuesday implies more softness ahead and a deeper retracement of the EUR’s Q4 gains. 

EUR/USD is holding up around the 38.2% Fibonacci support from the EUR’s late year rally (1.0875) but risks are tilted toward a drop back to the 1.0700/1.0800 range.