Losses through 1.0790 may extend to a little but not that much for now – Scotiabank

EUR/USD drifts back after a solid run higher. Economists at Scotiabank analyze the pair’s outlook.

Firmer support should emerge at 1.0760/1.0770

While there is little to remark upon in terms of underlying fundamentals supporting the EUR, there are some positive developments in the background – solid returns from European equities and a moderate pick up in (unhedged) portfolio inflows plus more supportive yield spreads – which are underpinning the EUR. 

Trend momentum on the intraday and daily DMIs are leaning bullish – but the signal is marginal and perhaps not enough to suggest a reliable base in the upper 1.0700s at this point.

Losses through 1.0790 may extend to a little but not that much for now. Firmer support should emerge at 1.0760/1.0770.

Resistance is 1.0840/1.0850.