EUR’s drop under 1.05 this morning was followed by a solid recovery to 1.0565, the daily high, that then triggered steady selling to the low 1.05s where it stands. Economists at Scotiabank expect to see an eventual break below 1.05 to open up the 2017 low of 1.0341.
Oversold conditions may stall the drop
“The EUR is clearly still under downward pressure, and while the first decline under 1.05 didn’t hold, the trend favours an eventual break under the figure that leaves limited support markers until the 2017 low of 1.0341.”
“The mid-figure and figure zone may stand as a floor and oversold conditions (which could still go a bit lower) may stall its drop.”
“After the daily high at 1.0565, the 1.06 area stands as resistance followed by ~1.0625 and the mid-1.06s.”