EUR/USD outlook remains neutral/bearish – Scotiabank

In view of Eric Theoret, FX Strategist at Scotiabank, the pair’s perspective points to the neutral/bearish side, with a potential test of 1.1150 on the cards.

Key Quotes

“The broader tone should leave EUR relatively range bound given EUR’s tendency to perform on a relative basis in periods of risk aversion. Measures of implied volatility remain low however risk reversals suggest a creeping rise in the cost of protection against EUR weakness”.

“The Monday-Tuesday pair of doji’s are suggestive of near-term uncertainty around 1.1230. Momentum signals are remarkably neutral and the ADX is trendless under 25. The 9 day MA (1.1217) appears to have provided near-term support over the past three sessions, however risks remain aligned to the downside following Thursday’s shooting star. We look to a break of 1.12 with expectations of weakness toward 1.1150”.