EUR/USD has tested the 1.14 level as rate speculation cools. Economists at Scotiabank expect the pair to plummet towards 1.10 once it becomes clearer that the European Central Bank will only marginally hike in 2022.

Break under 1.14 to open up the 1.13 level

“We think the ECB is set to disappoint markets looking for 50bps in hikes this year, and we see EUR gains reversing toward 1.10 once it becomes clearer that the bank will only marginally hike in 2022 (if at all).”

“A clearer EUR decline under 1.14 would open the door to a sharp reversal of its Thursday jump that would set 1.13 in its sights. Intermediate support is ~1.1350 and ~1.1330.”