EUR/USD closed unchanged around 1.1600 on Thursday, slowing gains as Lagarde pushed cautious policy message. Economists at Scotiabank expect the pair’s rebound to run out of steam and locate initial support at 1.1575. 

First real sign of steady selling pressure

“ECB President Lagarde said that while the rebound in the eurozone economy was increasingly advanced, it was ‘crucial that policy support was not withdrawn prematurely’. The dovish messaging clearly contrasts with the relatively more hawkish tone of the Fed and we suspect scope for additional EUR gains is very limited as a result.”

“We think a minor peak, at least, maybe developing but it is too soon to conclude that the rebound is poised to reverse more fully. We still prefer to look for opportunities to fade minor EUR gains, however.”

“We see minor resistance at 1.1640/50 now.”

“Support is 1.1575.”