Underlying trend momentum remains bullish – Scotiabank

EUR/USD is drifting back somewhat after gains stalled just under 1.10 on Tuesday. Economists at Scotiabank analyze the pair’s outlook.

Scope for losses is limited

Market bets – currently – that the Fed is more likely to blink first among the major central banks looking to ease next year continue to drive sentiment support in favour of the EUR.

Weakness below minor support at 1.0945 may see spot ease a little more in the near term but underlying trend momentum remains EUR-bullish and scope for losses is limited. 

Firmer support should develop around 1.09. Resistance is 1.1015/1.1020.