EUR/USD gains to remain limited to the low/mid 1.11 area - Scotiabank

Shaun Osborne, Chief FX Strategist at Scotiabank, notes that EUR/USD is showing no inclination to extend gains through the 1.11 area as he holds a quite negative outlook over the EUR from a medium-term view.

Key Quotes

“Spot remains capped under 1.11, with the market showing little desire to move markets significantly. Eurozone data reflected weaker economic confidence (pre-Brexit) for June. German data reflected stronger consumer confidence (July) and flat to slightly higher m/m readings for the German state CPI data. EU leaders continue to meet in Brussel and are urging the UK to initiate its exit as quickly as possible.”

“EUR/USD short-term technicals: neutral/bearish—EUR/USD is essentially moving sideways still. Spot is showing no inclination so far to extend gains through the 1.11 area and we still rather think the break lower in the market last week below the base of the 6-month rising channel base (1.1145/50) casts a quite negative outlook over the EUR from a medium-term point of view. Expect short-term gains to remain limited to the low/mid 1.11 area at most.”