The Euro (EUR) losses have extended—slightly— following last week’s hefty fall as investors eye next week’s ECB policy decision and anticipate some pickup in the central bank’s easing pace, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

EUR traders slightly lower

“A 1/4 point cut is all but fully priced in for the 17th and another 25bps cut is more or less priced in for December. Wider short-term spreads relative to the USD are a drag on the EUR’s outlook and technical momentum is bearish.”

“Spot’s breakdown from the minor consolidation that developed around the turn of the week above 1.0950 has extended a little but the drift lower in the EUR intraday keeps the technical tone negative after last week’s sharp move lower and break below key support at 1.10 (now resistance).”

“The 100- day MA (1.0934) may provide some short-term support for the EUR but near-term risks are geared towards a push to 1.0875/80 and losses may extend to the low 1.08 area.”