EUR’s gains stall around retracement resistance. Economists at Scotiabank analyze EUR/USD outlook.
Spot gains are overshooting the narrowing in Eurozone/US yields somewhat and EUR gains may slow or consolidate in the short run unless Thursday’s Eurozone PMI data bring positive news to bolster bullish momentum.
The broader trend higher in the EUR remains solid-looking but gains have been quite significant in a short space of time and the EUR topping out today right on the 61.8% retracement of the July/September decline warrants attention. Some consolidation – that is to say, drift lower – in spot could develop from here.
Support on dips should be firm, with trend momentum signals aligned bullishly across the short, medium and long-term DMIs.
Support is 1.0840/1.0880.