EUR / USD dips below 1.1600 after rejection at 1.1620

Get real time updates directly on you device, subscribe now.

  • The euro recovery attempt remains capped below 1.1600.
  • The common currency does not take advantage of the weakness of the USD.
  • EUR / USD is expected to extend its slide to 1.1100 – Scotiabank.

The EUR continues to float on either side of the 1.1600 level, unable to take advantage of the weak US dollar. The common currency rebounded from year-to-date lows at 1.1520 earlier this week, but lacks a follow-up to post a significant recovery and continues to waver between 1.1580 and 1.1620 for the second day in a row.

The euro rose bit by bit as the USD loses steam

The euro will close the week with gains, ending a four-week slide. Market mood has improved this week, with quarterly earnings in the financial sector topping expectations, increasing risk appetite, offsetting concerns about inflation and supply chain bottlenecks and damaging safe assets like the dollar.

The rally in US Treasury yields, another source of strength for the US dollar, has lost steam this week. The 10-year bond yield has retreated from levels above 1.60% Monday to weekly lows around 1.51% Thursday, with short-term yields climbing to multi-month highs, thus flattening the EE yield curve. .UU.

In addition, some market sources suggest that investors have “sold the deal” this week, closing long dollar positions after the US CPI confirmed that price inflation will hold for longer than expected and also The Fed did so with respect to its plan to begin reducing bond purchases. before the end of the year.

EUR / USD likely to extend losses to 1.1100 – Scotiabank

Scotiabank’s currency analysis team sees the current recovery of the euro as a selling opportunity within a long-term downtrend: “The gains have eased the short-term downward pressure on the place, but the long-term trend studies term (daily, weekly) remain firmly negative for the EUR; as a result, we expect limited upside potential for the EUR (…) Minor short-term gains are a selling opportunity; We continue to target the low of 1.14 in the short term for the EUR / USD and we believe that 1.11 is achievable in the coming months ”.

Technical levels

.

Get real time updates directly on you device, subscribe now.

Leave A Reply

Your email address will not be published.