FX Strategists at UOB Group noted the pair keeps the neutral outlook in the near term while it is expected to retest lower levels in the next weeks.
Key Quotes
24-hour view: “We highlighted yesterday that the decline in EUR “appears to have enough momentum to dip below last week’s 1.1527 low but a clear break of 1.1500 seems unlikely”. While EUR touched 1.1524, the subsequent sharp and rapid swing higher from the low came as a surprise. From here, the strong up-move has scope to move above the overnight high of 1.1615 but a break of last week’s top of 1.1659 is not expected (1.1640 is already a strong level). On the downside, support is at 1.1565 but the stronger level is closer to 1.1540. The 1.1524 low is unlikely to come into the picture for today”.
Next 1-3 weeks: “EUR dipped below last week’s 1.1527 low and touched 1.1524 yesterday before staging a surprisingly robust recovery. Despite the strong bounce, we continue to detect a weak underlying tone and see chance for EUR to probe the bottom of the expected 1.1470/1.1640 consolidation range. At this stage, a clear break below 1.1470 seems unlikely. All in, the outlook for EUR remains as neutral and even if there is a break above 1.1640, we do not expect any gains to be sustained”.
Share
