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FX Strategists at Scotiabank noted the outlook on spot remains neutral/bullish in the near term, while support should emerge in the 1.1700/20 band.

Key Quotes

“EUR is up modestly from Monday’s close and quietly consolidating in the mid/upper-1.17s. Comments from ECB Chief Economist Praet delivered modest, short-lived weakness in the EUR as they pushed back on the market’s hawkish interpretation of Draghi’s comments from Monday. Tuesday’s fundamental releases have included stronger than expected wholesale price figures from Germany and mixed confidence figures out of France. Record bearish yield spreads remain a significant headwind for EUR however risk reversals are showing a considerable moderation in the premium for protection against EUR weakness vs. the USD and a continued rise in the premium for protection against EUR strength vs. GBP”.

“Momentum indicators are bullish and the DMI’s are confirming as EUR consolidates around the first major retracement level (38.2% at 1.1780) of its February-August decline. We note the absence of any major significant resistance levels ahead of the midpoint of the 2018 range at 1.1928 and the 200 day MA at 1.1947. Near-term support is expected between 1.1720 and 1.1700″.