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EUR retraces yesterday’s losses - Scotiabank

FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, notes EUR retracing yesterday’s losses to break above 1.25.

Key Quotes

“During the month of November, EUR has traded in a relatively narrow 220 point, 1.2358 to 1.2578, range, suggesting the currency is waiting for a catalyst to shift it.”

“Today’s support came from a broad environment of USD weakness, as well as an encouraging German ZEW print, beating expectations at 11.5 (the third month in a row where the release proved an upward surprise). This was enough to offset yesterday’s dovish tone from President Draghi, who highlighted that sovereign bond buying could be a measure the ECB turns to.”

“The market will now turn its attention to Thursday’s release of PMIs. We expect EUR to trend lower, but at a more moderate pace; holding a Q4 2015 target of 1.21 and a Q4 2016 target of 1.17.”

“EURUSD short‐term technicals: mixed—suggesting better risk reward elsewhere; as the MACD has shifted into buy territory and spot has failed to break to a fresh low.”

“Support lies at 1.2400; resistance comes in at 1.2580.“

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