The pair’s stance remains weak, while a move below 1.1297 is somewhat unlikely, according to FX Strategists at UOB Group.
Key Quotes
24-hour view: “EUR traded in a relatively quiet manner between 1.1337 and 1.1387 yesterday, narrower than our expected 1.1340/1.1405 consolidation range. Downward momentum has improved with the subsequent weak daily closing in NY (1.1344) and the immediate risk is tilted to the downside. From here, a move below last week’s 1.1332 low would not be surprising but the odds for a clear break of the year-to-date low at 1.1297 are not high. Resistance is at 1.1370 but only a move above 1.1395 would indicate that the current soft patch has stabilized”.
Next 1-3 weeks: “EUR closed on a soft note yesterday (NY close of 1.1344, -0.23%) but last week’s 1.1332 low is still intact. After showing signs of waning, short-term downward momentum has picked up again. For now, we are holding on to the same view that “EUR is still weak; the prospect for sustained break below the year-to-date low of 1.1297 is not that high”. However, the odds for a break of 1.1297 has improved and would continue to improve unless EUR can break above 1.1415 (‘key resistance’ previously at 1.1450) within these 1 to 2 days. In other words, we are near an ‘inflection’ point wherein the price action in the next couple of days would determine whether EUR would continue to head south in the coming days (and possibly weeks) or stabilize to consolidate and trade sideways”.
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