A second week of net losses for EUR/USD has pushed the pair back to retest the 40-Day Moving Average point at 1.0844 today. Economists at Scotiabank analyze the pair’s technical outlook.

Resistance seen at 1.0875/85

Short-term trend signals are EUR bearish but the daily DMI is flat and the weekly signal remains bullish. This is not obviously the set-up for a sustained EUR decline now. But a sustained push under the mid-108 area would point to weakness extending and a drop back towards key support at 1.0675/00. 

Resistance is 1.0875/85 on the day.