EUR/USD attention to 1.2335 – Scotiabank

FX Strategists at Scotiabank noted the relevance of the key support in the 1.2330 area.

Key Quotes

“Solid German factory orders data (+3.8% in Dec m/m) may have helped underpin the EUR somewhat through the European trading although Eurozone retail PMI data were a little on the soft side. German coalition talks are progressing and positive news on the formation of a Grand Coalition (CDU/CSU and SPD) may help underpin EUR sentiment – if broader market volatility subsides”.

“We note that, despite the volatility in the markets, last week’s 1.2335 low does not look under threat at this point. Holding this support point is vital in the short run as, after three tests of the 1.2530/40 area, a break under 1.2335 effectively triggers a minor double top and implies the risk of a drop to 1.2230/40. Back above 1.2435 intraday shores up the EUR’s technical situation a little more”.