EUR/USD technically bearish, strong resistance at 1.1100 - Scotiabank

Shaun Osborne, Chief FX Strategist at Scotiabank says EUR/USD broader tone remains soft, if not outright weak.

Key quotes

“The EUR can perhaps sigh with some relief that Spain’s elections at the weekend saw support for PM Rajoy’s People’s Party increase slightly, whilst remaining short of a majority, but the anti-establishment Podemos failed to gain any momentum.”

“Still, the overarching focus remains on the fall-out from the UK’s referendum and the broader impact on the EU; this is keeping bearish bets on the EUR very much in vogue in the short-term at least. We rather think data reports this week are of secondary consideration.”

“EURUSD short-term technicals: bearish—Spot is holding close to overnight lows just under 1.10 but the broader tone here remains soft, if not outright weak. The break below the 6-month channel base last week (1.1138) suggests to us 1) long-term resistance above 1.14/1.15 remains intact and 2) the broader bear trend is poised to resume. We expect strong resistance on EURUSD gains towards 1.1100.”