The EUR follows the dollar’s negative tone with a modest 0.2% gain, having only recovered about a quarter of Tuesday’s decline. As long as the EUR/USD trades below 1.1350, Scotiabank economists expect the pair to eventually break below 1.13.
The euro remains at risk of losses due to tensions between Russia and Ukraine
“In addition to a weak outlook based on monetary policy divergences, the EUR remains at risk of losses due to tensions between Russia and Ukraine, with the former not relenting in its military pressure.”
“We target a break below 1.13 in the coming weeks to an eventual test of 1.10 when the Fed’s tightening cycle begins.”
“EUR/USD will need to break above the 1.13 middle zone and then 1.1375/85 to signal a possible bounce back to 1.14.”
“For now, the pair remains above/around its 50-day MA at 1.1322, which may keep it supported. The big figure and 1.1280/85 continue as support”.