The EUR/USD’s gains through the low 1.16s last week have faded. From a technical point of view, the pair points to a slump to the low 1.14s, economists at Scotiabank report.

See: ECB to leave the euro sluggish as its policy has sequence limitations – TDS

Yield differentials to pressure the euro

“With ECB officials remaining generally dovish in their policy outlook, we think yield differentials will continue to weigh on the EUR in the short-to-medium term.”

“Spot’s drift back to the 1.1575/85 zone today leaves it vulnerable to renewed pressure on the low 1.15 area.”

“We think broader technical pointers continue to indicate scope for EUR/USD losses to extend to the low 1.14s in the near-term (2-4 weeks) while medium-term pointers suggest losses to the 1.11 area.”