EUR/USD: Looks technically oversold on the charts - Scotiabank

The Euro (EUR) looks quite soft below 1.08, pressured by broader USD gains on the one hand and simmering speculation that the ECB could cut rates aggressively in December, Scotiabank's Chief FX Strategist Shaun Osborne notes.  

EUR slips under 1.08

"Swaps are pricing in 35bps of easing risk currently. ECB President Lagarde is talking (10ET) again in the US this morning, as are some of her governing council colleagues. Yesterday's comments from ECB policymakers stressed optionality on forthcoming policy decisions, leaving the door open to a pickup in the pace of easing, if required."

"EUR/USD is trading at new lows for the move down this morning and pressuring the last remaining supports below 1.08 (retracement support at 1.0795 and the early August low at 1.0778). The EUR sell-off is overshooting, in my opinion, with intraday and daily oscillator signals highlighting an increasingly oversold situation."

"Momentum is king, however. Unless the EUR can steady and recover in the next day or so, the move lower could extend towards 1.05/1.06."