EUR/USD: Losses to extend to the mid-1.04 area before a more sustainable base can develop – Scotiabank

EUR/USD edges higher after reaching minor new cycle low. Short-term trading patterns are tilting bullish but a fall to the mid-1.04s is on the cards.

EZ yields rise

“Core Eurozone 2Y yields are trading above 3% for the first time since 2008. Firm yields may provide some underpinning for the EUR in the medium term (and limit near-term losses against the USD).”

“The six-hour chart shows the EUR carving out a bullish outside range session after its early dip to 1.0533. This may see spot regain 1.06-plus in the short run but we still rather think that broader trends point to EUR/USD losses extending to the mid-1.04 area before a more sustainable base can develop.”

“Resistance is 1.0575/1.0625.”