The pair’s recovery is now focused on 1.1435 amidst the ongoing neutral tone, suggested FX Strategists at Scotiabank.
Key Quotes
“There were no data reports of much consequence from the Eurozone this morning but calmer markets generally have helped steady Italian bonds and narrow Bund/BTP spreads modestly (295bps for the 10Y spread). Spot’s rebound from a little above 1.1300, just above where the market based in August, is fueling speculation that a large option structure is being defended in the market. In addition, spot gravitate towards significant option expiries (1.14 strikes) for today and tomorrow”.
“EURUSD rebounded nicely from the low 1.13 area yesterday, which was not too surprising, considering the importance of support around the figure area. Gains have extended through short-term trend resistance (now support) at 1.1330/35 but may be stalling as the North American session picks up (potential “evening star” reversal on the hourly chart). A push through resistance at 1.1435 and/or firm close to the week could give the EUR a little more support in the coming weeks”.
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