According to FX Strategists at UOB Group, the pair remains neutral but a bullish attempt is not ruled out in the near term.
Key Quotes
24-hour view: “EUR traded between 1.1541 and 1.1639 yesterday, wider than our expected 1.1550/1.1620 consolidation range. The subsequent firm daily closing in NY (1.1629) suggests there is room for EUR to continue to edge higher but 1.1675 is a strong level and is expected to offer solid resistance (the next resistance at 1.1710 is unlikely to come into the picture). Support is at 1.1600 but only a break of 1.1575 would indicate that the current upward pressure has eased”.
Next 1-3 weeks: “We have held the same view since Monday (03 Sep, spot at 1.1595) wherein “EUR could drift lower but any weakness is viewed as part of a 1.1520/1.1675 consolidation range and not the start of a sustained decline”. EUR subsequently touched a low of 1.1527 on Tuesday (04 Sep) and has since rebounded quite strongly. While we continue to hold a neutral stance, the improved underlying tone suggests that there is scope for the rebound in EUR to extend higher within the next several days. However, it is premature to expect the start of a bullish phase even though a move higher towards last month’s 1.1733 top would not be surprising. At this stage, we do not anticipate a clear break above this level. On the downside, only break of 1.1530 would indicate the current mild upward pressure has eased”.
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