The Euro (EUR) is soft and down a fractional 0.1% vs. the US Dollar (USD) as it extends its latest pullback within the flat range from last June, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Euro extends pullback within flat range since June

"This week’s data releases have been mixed and the EUR appears to have only responded to the disappointments (CPI), while ignoring the surprises (German industrial production). The data have weighed on rate expectations and eroded some of the EUR’s fundamental support, and we’ve observed added pressure from sentiment as well with a notable softening in the premium for protection against EUR strength. Policy guidance from the ECB remains broadly neutral."

"We had flagged the 50 day MA (1.1651) as an important level of near-term support and signaled caution in the event of a break. While the break has not been material, we are now somewhat more concerned about the extension of the pullback and see little additional support between current levels and 1.16."