EUR/USD faces further downside below 1.11 – Scotiabank

Strategists at Scotiabank have noted the bearish stance for the pair in the short-term.

Key Quotes

“The EUR has been very steady in the past 24 hours… we continue to see limited upside for EURUSD beyond 1.12, given current rate spreads (2Y yield gap remains near 127bps premium for the USD)”.

“We rather think modest EURUSD gains are a sell as our fair value model suggests EURUSD remains overvalued”.

“EURUSD is steadily retracing its late July rally from the upper 1.09 area after peaking at 1.1233 this week. Price action suggests spot is consolidating ahead of a cluster of support in the low 1.11 area currently”.

“We see support at 1.1137 this morning and the risk of renewed EUR losses on a break below here. We see intraday resistance in the upper 1.11 zone”.