EUR/USD consolidating ahead of another push lower? - Scotiabank

EUR/USD sell-off has stopped but a reversal is absent from the charts at this point, says Shaun Osborne, Chief FX Strategist at Scotiabank, which maintains a neutral/bearish view on the pair.

Key quotes

“EUR/USD has steadied in generally calmer trade. There was little data of any consequence from Europe today. Chancellor Merkel warned the UK that it will not get preferential treatment once it leaves the EU. Nothing has changed in the grander scheme of things post-Brexit so we expect only limited scope for EUR/USD to gain currently.”

“EURUSD short-term technicals: neutral/bearish—The sell-off has stopped but a reversal is absent from the charts at this point. At most, markets appear to be consolidating ahead of another push lower. Short-term trends suggest strong initial resistance for EURUSD in the 1.1130 area, which coincides with longer-term (former trend channel support on the daily chart) at 1.1140. Broader trend signals are still aligned bearishly, albeit relatively weakly at this stage.”