EUR/USD: Upside may be limited to the 1.0550/1.0600 area – Scotiabank

EUR/USD has tested sub-1.05 levels twice in the past few hours. Economists at Scotiabank analyze the pair’s outlook.

Headwinds remain

A minor low/reversal may have been reached in the short run after the EUR tested the upper 1.04 area twice since Wednesday. A minor double bottom is in play but upside may be limited to the 1.0550/1.0600 area.

The Euro does appear to be deeply oversold in the short run at least but the pair will need to regain 1.06+ to suggest a more sustained rebound is unfolding.

Support is 1.0475/1.0480.