EUR/USD: A pause and correction in the rally may be appropriate – Scotiabank

Solid Euro gains saw EUR/USD extend through the low 1.09s before slipping back. Economists at Scotiabank believe that a pause and correction in the rally is due out.

Intraday price action looks weak 

“Broader EUR gains look solid and well supported by bullish-leaning trend oscillators. But intraday price action looks weak and warns of a squeeze higher in the USD.”

“Short-term signals suggest a top/reversal (bearish ‘evening star’) is developing around the daily high at 1.0930.”

“Spot has gained relentlessly from last week’s low just above 1.05 so a pause and correction in the rally may be appropriate.”

“We look for support around 1.08 and (firmer) at 1.0750/75.”