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    EUR/USD reluctant to extend higher - Scotiabank Ani Salama

    Despite the generally softer USD undertone, the EUR has been very reluctant to extend higher, said Shaun Osborne, Chief FX Strategist at Scotiabank, adding that investors perhaps do not want to extend EUR positioning as the ECB extends its asset purchase programme. Key Quotes“Current spot levels are virtually unchanged from Friday’s closing levels (whereas the DXY, which is heavily weighted towards the EUR, is down around 0.4% over the same period). Investors perhaps do not want to extend EUR positioning as the ECB extends its asset purchase programme (corporate bond purchases commenced today).”“Eurozone-US short-term spreads are little changed at 133bps (for the 2Y tenor); this remains USD-supportive, we believe and should limit additional pressure on the big dollar in the near-term.”“EURUSD short-term technicals: neutral/bearish—Short-term chart patterns are giving little or nothing away; the EURUSD rally has stalled around the 50% retracement point of the May decline (1.1357, see bottom chart) and the sideways trading pattern over the past three days or so could be a consolidation, ahead of another push higher, or a topping pattern.”“Daily charts show two consecutive “doji” candles, which leans towards the negative. Broader patterns (weekly) remain bearish. We favour fading EUR gains still.”


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