The euro (EUR) has recovered slightly from up-to-date cyclical lows near 1.0240 yesterday against the US dollar (USD), but so far in the session the rebound has stalled below 1.03, notes Shaun Osborne, chief currency strategist at Scotiabank.

The EUR is seeing a slight rebound

“From my point of view, the euro is quite undervalued, but there is no reason to expect significant growth at this point. Unemployment in Germany increased by 10,000 in December, keeping the unemployment rate at 6.1%. The data was better than expectations for an increase of 15,000.”

“Short-term price signals suggest that there may have been a slight trend reversal around yesterday’s low. The bullish hammer signal on the 6-hour candlestick chart provided some positive momentum for the EUR over the weekend, but the broader trend remains strongly bearish and a rebound is unlikely to materialize at this point.”

“Resistance is developing around 1.03, but above this value there may be a slight shift to reach 1.0360/90, where there is likely to be more selling interest. Support is 1.0240/50.”