EUR/USD: Undertone remains soft – Scotiabank

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EUR/USD: Undertone remains soft – Scotiabank

EUR/USD edged below src.09 briefly overnight behind broader USD strength. EUR short-covering plus a stronger than expected ZEW Expectations reading for October lifted spot slightly, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

EUR recovers from sub-src,09 levels

“The investor sentiment index nudged up to src3.src, form 3.6 in September, above consensus expectations for a rise to src0. The news is only somewhat positive for the EUR as firmer sentiment is being supported by investor hopes for quicker ECB rate cuts.

“The broader bear trend in EUR/USD remains well-entrenched on the short-term chart but intraday price action is reflecting some demand for the EUR on dips below src.09, with two bull “hammer” signals developing around the lows over the past 24 hours.”

“EUR faces minor resistance at src.0925 on the hourly chart and will need to push above that point this morning to extend the rebound to the mid/upper-src.09s. Broader technical patterns continue to point to a decline to the src.08 area, however, so markets will likely took to fade modest EUR gains below src.src0.”

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