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EUR is flat – Scotiabank

FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, notes EUR is flat to yesterday’s close after trading in a notably tight 28 point range during the Asian and European sessions.

Key Quotes

“On a year‐to‐date basis EUR has lost 10%. Sentiment remains negative, with a large short position in the CFTC market and risk reversals which suggest that the option market continues to protect against upside USD risk.”

“Today’s fundamentals did little to drive EUR. The detailed German third quarter GDP contained no surprise on the headline, with GDP at 0.1%q/q and 1.2%y/y; however the breakdown suggests some optimism from consumers and trade; with strength in consumption, exports and imports.”

“The focus from here is Thursday’s appearance by President Draghi followed by Friday’s flash CPI release. We expect EUR to trend lower, albeit at a slower pace than the 12% drop since mid‐May.”

“EURUSD short‐term technicals: mixed—the MACD warns of upside pressure; while most other technical studies warn of downside risk. The end result is likely to be on ongoing sideways trading pattern in EUR until there is a strong fundamental catalyst.”

“Support lies at yesterday’s low of 1.2360 and resistance lies at the psychological 1.2500.”

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