EUR/USD rebounds from sub-par levels but headwinds remain. In the view of economists at Scotiabank, its steep break under parity marked a key development in the downtrend that signals further losses ahead.
Bearish price action in the near term
“The EUR is facing a multitude of headwinds that are bound to see it close under, and extend losses beyond, the parity mark.”
“The EUR has conveniently held in oversold territory over most of the week, which may be keeping it supported and preventing a sustained drop under 1.00. But the broader trend and limited gains through the mid-1.00s (aside from its short-lived push through 1.01 on Wed) are aligned for bearish price action in the near term.”
“Support past 1.0000/10 is 0.9985 and the Thu low of 0.9952.”
“Resistance is ~1.0050, 1.0074, and the 1.01 big figure zone.”