According to FX Strategists at UOB Group, the pair risks a drop to 1.1365 if the 1.1500 area if cleared in the near term.
Key Quotes
24-hour view: “We expected a lower EUR yesterday but highlighted “in view of the lackluster momentum, a clear break below the major 1.1525 support seems unlikely”. EUR subsequently dipped to a low of 1.1527 before rebounding quickly. While downward pressure has eased, EUR does not appear to be ready for a significant recovery and is more likely to consolidate and trade sideways. Expected range for today; 1.1530/1.1580″.
Next 1-3 weeks: “There is not much to add as EUR hit a low of 1.1527 yesterday before staging a mild recovery. 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). While the prospect for a sustained move below this major support zone is still not high, it has improved and will continue to improve unless EUR can break above the ‘key resistance’ at 1.1640 (level unchanged from yesterday). 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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