Back
17 Dec 2015
EUR/USD: bearish outlook below 1.0920 - Scotiabank
FXStreet (Guatemala) - Shaun Osborne Chief FX Strategist at Scotiabank explained the current conditions surrounding EUR/USD that are bearish.
Key Quotes:
"The European data this morning reflected better Eurozone construction output for October (+0.5% from -0.7% in September), better Italian trade data and a somewhat disappointing German IFO survey, with the business climate indicator falling slightly to 108.7 (109 last) in December and the current conditions index sliding more obviously (112.8, from 113.4); the outlook component dipped slightly too (104.7 from 105)."
"The data suggest German growth may slow through the turn of the year. EZ-US spreads remain a drag on the EUR’s performance at 134bps today, near recent peaks and the widest since 2006."
"EURUSD short-term technicals: bearish—negative price action yesterday supports the near-term negative price outlook for EURUSD."
The market has firmly, and more obviously now, rejected the 1.10+ area where the 100-day and 200-day MA signals converge.
Weakness below 1.0920 implies immediate pressure on 1.0775/1.0800 (middle chart) and we think weakness below 1.0795/00 implies renewed, medium-term downside pressure building on spot again."
Key Quotes:
"The European data this morning reflected better Eurozone construction output for October (+0.5% from -0.7% in September), better Italian trade data and a somewhat disappointing German IFO survey, with the business climate indicator falling slightly to 108.7 (109 last) in December and the current conditions index sliding more obviously (112.8, from 113.4); the outlook component dipped slightly too (104.7 from 105)."
"The data suggest German growth may slow through the turn of the year. EZ-US spreads remain a drag on the EUR’s performance at 134bps today, near recent peaks and the widest since 2006."
"EURUSD short-term technicals: bearish—negative price action yesterday supports the near-term negative price outlook for EURUSD."
The market has firmly, and more obviously now, rejected the 1.10+ area where the 100-day and 200-day MA signals converge.
Weakness below 1.0920 implies immediate pressure on 1.0775/1.0800 (middle chart) and we think weakness below 1.0795/00 implies renewed, medium-term downside pressure building on spot again."