EUR/USD room for a test of the low-1.1600s – Scotiabank

Eric Theoret, FX Strategist at Scotiabank, believes spot could be headed towards the lower 1.1600s.

Key Quotes

“Draghi’s Jackson Hole speech (Friday) had been highly anticipated however expectations have moderated on the back of rumors suggesting no major shift in tone. The 10Y Germany-U.S. spread is steady around the mid-point of its range from mid-July and risk reversals are neutral”.

“Momentum signals are neutral bearish, DMI’s are muted, and short-term MA’s have converged. EUR remains well supported around 1.17 as we note the sequence of lower highs from early August This descending triangle formation is typically resolved in a bearish manner, opening up the risk of a push to the lower 1.16s”.