FX Strategists at UOB Group remain neutral on the pair while it should remain well supported around 1.1430 in the near term.
Key Quotes
24-hour view: “Expectation for sideway trading yesterday was wrong as EUR slumped and cracked several strong support levels with ease. While quickly approaching oversold levels, the rapid decline has scope to extend lower to 1.1470. At this stage, we do not expect a sustained break below this level (next support is at last month’s low near 1.1430). Resistance is at 1.1525 but only a break of 1.1550 would indicate that the current downward pressure has eased. The 1.1583 high seen early yesterday is not expected to come into the picture”.
Next 1-3 weeks: “After 3 failed attempts to break clearly above 1.1620 in recent days, EUR ‘gave up’ and staged a surprisingly sharp and swift decline that easily took out the 1.1520 ‘key support’ (low of 1.1493 during last NY hours). Downward pressure has built up quickly and considerably as EUR closed on a weak note in NY (close of 1.1499). That said, it is clearly premature to expect the start of a bearish phase. From here, we see chance for EUR to weaken further in the coming days but there are a couple of support levels of note, namely at the monthto-date low near 1.1430 followed closely by 1.1400. On the upside, 1.1590 is likely strong enough to cap any EUR strength, at least for the next one week or so”.
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