EUR/USD a test of 1.1505 loses traction – UOB

The probability of a visit to the 1.1500 area appears to have lost some momentum for the time being, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Expectation for sideway trading yesterday was wrong as EUR dropped to a low of 1.1507 before staging a swift and robust recovery to hit an overnight high of 1.1633. While the rebound appears to be running ahead of itself, there is scope for a test of the 1.1645/50 resistance. At this stage, a move beyond the next resistance at 1.1680 is not expected. Support is at 1.1575 followed by 1.1540. The 1.1507 low is not expected to come into the picture for now”.

Next 1-3 weeks: “We have held the same view since Wednesday (20 Jun, spot at 1.1585) that “a dip below 1.1505 not ruled out but weakness is unlikely to be sustained”. EUR briefly touched 1.1507 yesterday before staging a robust recovery. The price action reinforces our view that EUR is not ready to reenter a bearish phase just yet. That said, only a break back above 1.1680 (‘key resistance’ level remains unchanged) would indicate that the current downward pressure has eased. Until then, there is still risk for a dip below 1.1505 but the prospect for such a move is not high now”.