EUR/USD broader downtrend remains resolutely intact  - Scotiabank

Analysts at Scotiabank note that EUR/USD short-term technical perspective looks neutral to bearish as despite yesterday’s recovery, the bigger picture suggests the broader downtrend remains resolutely intact.

Key Quotes

“EURUSD is little changed on the day. Germany delivered a surprisingly strong ZEW survey today, suggesting investors are full of the holiday spirit. The current conditions index rose to 63.5 (59.0 expected), perhaps reflecting the ECB’s largesse in extending its QE programme last week. Expectations were modestly disappointing, however, remaining unchanged over November at 13.8.

“EURUSD short-term technicals: neutral/bearish—It is tempting to describe the short-term outlook here as “bullish, bearish and/or neutral”; EURUSD had a solid day yesterday, rising strongly (bullish outside range day) from a level (low 1.05 area) that has held a number of tests over the past month. That should be important. But the bigger picture suggests the broader downtrend remains resolutely intact and short-term prospects only really improve obviously for the EUR above 1.0840/50 from here.”

“Intraday price action has stalled three times around 1.0650 in the past 24 hours and the market looks soft again now. We think the EUR remains vulnerable to a push under 1.05 and a drop towards 1.01.”