EUR/USD: limited upside scope - Scotiabank

FXStreet (Guatemala) - Analysts at Scotiabank explained that equity market volatility continues to provide the EUR with some support but note that the positive correlation between the EUR and the VIX index is weakening from recent peaks (+36% on a rolling 100-day correlation window study).

"EUR/USD should react to clear signs of policy divergence this week, if they develop. We favour shorting EUR/USD.

Intraday patterns look modestly positive for EUR/USD, with spot breaking hourly trend resistance.

We see limited upside scope overall, however, and see strong resistance at 1.0860 on the day. More broadly, we think there is major resistance overhead at 1.0950/70."