EUR’s gains have been tapped out around the mid-1.07s. Economists at Scotiabank believe that the EUR/USD pair could fall as low as 1.0500/50.

A clear technical peak looks to be developing

“Spot gains have faltered in the low/mid 1.07 area this week, reflecting resistance defined by the 40-DMA (1.0723) which EUR gains have failed to crack in a sustained manner.”

A clear technical peak looks to be developing; a low close for the pair today (at or near current levels) will form a bearish outside range day and the third leg of a bearish ‘evening star’ candle pattern. Combined, these pointers suggest more EUR losses ahead and a retracement in spot’s recent gains towards 1.0500/50 potentially.”