FX Strategists at UOB Group keep the neutral stance on the pair, adding that the inability to break above 1.10 in the short term could trigger extra losses.
Key Quotes
24-hour view: “We highlighted yesterday “unless there is a clear break of 1.1000, EUR could edge lower to 1.0950″. We added, “the next support at 1.0930 is a relatively strong level and is unlikely to yield”. EUR subsequently rose to 1.0995 before dropping to 1.0939 during NY hours. For today, the risk remains on the downside and a breach of 1.0930 would not be surprising. That said, the next support at 1.0905 is likely out of reach. Resistance is at 1.0980 followed 1.1000. The latter level is acting as a very solid resistance now”.
Next 1-3 weeks: “EUR continues to ‘respect’ the 1.1000 level as it retreated after touching 1.0995 yesterday. While the shorter-term outlook appears to have softened (see 24-hour view above), the price action over the past several days is still within the 1.0890/1.1025 range first indicated last Thursday (03 Oct, spot at 1.0960). Note that the current spot level of 1.0960 is at the same level as last Thursday. In other words, EUR is still in a sideway-trading phase and could continue to trade between 1.0890 and 1.1025 for a while more. Looking ahead, the top the range still appears to be more ‘vulnerable’ but unless EUR could surmount 1.1000 within these few days, the risk will shift quickly to the downside instead”.
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