The pair could slip back to the 1.1500/10 band in the next weeks, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “In line with expectation, EUR dipped below last month’s 1.1572 low but did not have enough momentum to challenge the major 1.1525 support (low of 1.1558). The weak daily closing in NY last Friday suggests that the underlying tone is still weak and the immediate bias is tilted to the downside. However, in view of the lackluster momentum, a clear break below the major 1.1525 support seems unlikely (minor support is at 1.1550). Only a break above 1.1600 would indicate that the current mild downward pressure has eased”.
Next 1-3 weeks: “As highlighted last Friday (03 Aug, spot at 1.1585), while we maintain a neutral stance, the risk has shifted to the downside and the major 1.1500/10 support zone is likely to be retested (note that EUR touched 1.1506 in May and 1.1507 in June). At this stage, the odds for a sustained move below this major support zone are not high but the current downward pressure is expected to increase from here unless EUR can move and stay above the ‘key resistance’ level of 1.1640 (previously at 1.1680). Looking further ahead, a clear break of 1.1500/10 could potentially lead to a rapid drop to the next major at 1.1365″.
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