EUR’s leak lower continues. Economists at Scotiabank expect the EUR/USD pair to continue under downside pressure for the time being.

Scope for EUR gains is very limited

“ECB hawks are responding to this week’s data showing upward revisions to Jan CPI data and a record rate of core inflation. Hawkish comments may slow EUR losses against the USD in the near term but the USD’s overall yield advantage suggests – for now – that a lower EUR/USD remains the most likely outcome.”

“Technicals suggest firm resistance at 1.0610/15 intraday, with the EUR really needing to regain 1.07+ to stabilize.”

“Broader technical patterns still point to a drop in the EUR to 1.0461 (retracement support from the EUR’s recent 0.95/1.10 rally).”