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In view of FX Strategists at Scotiabank, EUR/USD‘s outlook remains neutral/bearish in the short-term horizon, while the initial hurdle emerges in the 1.1620/50 band.

Key Quotes

“The outlook for relative central bank policy is dominating as market participants consider ECB President Draghi’s Sintra speech and his message of ‘patience’ highlighting the need for ‘significant’ monetary accommodation. Euro area rate expectations remain relatively unchanged however, and are still within the levels observed at the height of the Italian-driven turmoil from late May. Yield spreads are actually narrowing as risk aversion pressures U.S. Treasury yields to a greater extent relative to bunds. Positive headlines relating to migration are also being overlooked in the context of trade policy uncertainty, and hint to a potential constructive outcome at next week’s EU summit”.

“Momentum indicators are bearish but only modestly so, and DMI’s are bearishly aligned however their magnitude is relatively muted. Near-term support is limited ahead of the late May low at 1.1510 and we highlight the importance of the 50% retracement of the rally from January 2017 just below 1.1450. Near-term resistance is expected between 1.1620 and 1.1650″.