According to FX Strategists at UOB Group, EUR/USD’s stance remains negative but a move to 1.1580 is not favoured for the time being.
Key Quotes
24-hour view: “Our expectation for EUR to ‘dip below the major support at 1.1610’ did not materialize as it traded between 1.1621 and 1.1656 before closing little changed at 1.1640 (-0.06%). While momentum indicators are mostly ‘neutral’ now, there is still chance for EUR to test the 1.1610 support first before a more robust recovery can be expected. For today, the next support at 1.1580 is not expected to come into the picture. Resistance is at 1.1670 followed by 1.1695.”
Next 1-3 weeks: “In our latest update from last Thursday (29 Oct, spot at 1.1745), we indicated that ‘the improvement in downward momentum suggests the risk remains on the downside but EUR has to close below 1.1685 before a more sustained decline can be expected’. We added, ‘the next support is at 1.1610’. EUR subsequently closed below 1.1685 and dropped to a low of 1.1638 last Friday. From here, a break of 1.1610 would not be surprising but the next level at 1.1580 is a solid support and may not be easy to crack. All in, the current negative phase is deemed as intact as long as EUR does not move above 1.1745 (‘strong resistance’ level previously at 1.1835).”
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