EUR/USD 1.3647 is key - Scotiabank

By FXstreet.com | Updated July 30, 2014 AAA

FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank notes the conditions surrounding the EUR/USD as we are getting two sides to the story here.

Key Quotes:

"Yesterday, EUR reached a multi-month high, flirting with 1.37; however into the NA open it has softened, down 0.1%”.

“Recent data has been mixed; the Eurozone manufacturing PMI suggest expansion but at a slower rate than expected; the flash CPI hints at a bottoming in disinflationary pressures; while today’s PPI warns of ongoing disinflationary pressures."

"We expect it is the above that will shape the tone at the ECB. Last month’s actions were dramatic but it is still early to judge the impact."

"Accordingly we expect a fairly cautious tone, but one the market is prepared for. For EUR this implies it should be comfortable trading in a broad range of 1.35 to 1.3750."

"EUR/USD short-term technicals: bullish—most studies warn of upside momentum; however a break and close below Monday’s open of 1.3647 would warn of fading upside pressure. Support lies at 1.3600; while resistance comes in at the 100-day MA at 1.3740."

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