In opinion of FX Strategists at UOB Group, EUR/USD is now seen within the 1.1710-1.1860 range in the next weeks.
Key Quotes
“We highlighted yesterday that ‘downward momentum has improved a tad and the bias for today is tilted to the downside’. We added, ‘1.1770 is a strong support and may not be easy to break’. EUR subsequently traded between 1.1791 and 1.1838, closed at 1.1795 before dropping sharply after NY close. The rapid increase in downward momentum suggests EUR could weaken further but the next major support at 1.1735 is unlikely to come into the picture for now (minor support is at 1.1755). Resistance is at 1.1805 followed by 1.1830.”
Next 1-3 weeks: “We have held the same view since last Wednesday (21 Oct, spot at 1.1825) wherein ‘the bias for EUR is titled to the upside but the major resistance at 1.1900 may not come into the picture so soon’. EUR subsequently rose to a high of 1.1880 but has since retreated and at the time of writing, is holding just above the ‘strong support’ level of 1.1770. Upward momentum has more or less dissipated and the current movement is viewed as the early stages of a consolidation phase. That said, the near-term risk is titled to the downside but for now, any weakness is viewed as part of a 1.1710/1.1860 range. In other words, EUR is unlikely to move below 1.1710 in a sustained manner.”
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