EUR/USD further weakness through 1.12  - Scotiabank

Eric Theoret, Strategist at Scotiabank notes that EUR/USD technical perspective remains bearish and they look for further weakness toward 1.1120 on a break below the 1.12 mark.

Key Quotes

“EUR is soft, retreating back toward 1.12 as it retraces last week’s U.S. data (non-mfg ISM) and ECB-driven rally. Fundamental releases have been limited, leaving the focus squarely centered on the broader market tone as markets digest a shifting outlook for Fed rate hikes.” 

“Measures of implied EUR volatility are climbing across a range of time horizons and risk reversals suggest a rise in the premium for protection against EUR weakness. Remain bearish.”

“EURUSD short-term technicals: bearish—EUR is under pressure, retreating from last week’s short-lived high above 1.13. Thursday’s shooting star candle has been followed by two consecutive sessions of weakness, and EUR is testing near-term support around the 100 day MA at 1.1211.” 

“We look to further weakness through 1.12 toward the September 6 open around 1.1150 followed by the August 31 low around 1.1120. Near-term gains are likely to be limited above 1.1250.”