FX Strategists at UOB Group now see EUR/USD resuming the downside although a test of the 1.1100 neighbourhood looks unlikely for the time being.
Key Quotes
24-hour view: “Expectation for EUR to trade sideways was incorrect as it staged a surprisingly deep decline but the down-move was checked by the strong 1.1200 support (overnight low of 1.1200). Downward momentum has improved and from here, barring a move above 1.1245 (minor resistance is at 1.1225), the weakness in EUR is expected to extend lower but the major 1.1180 support is unlikely to yield so easily (next support is at 1.1155)”.
Next 1-3 weeks: “After trading in a relatively subdued manner for a few days, EUR staged a surprisingly sudden and sharp decline and tested the bottom of our expected 1.1200/1.1310 sideway trading range (first indicated last Thursday,11 Jul, spot at 1.1255). From here, a move below 1.1200 and the mid-June low near 1.1180 would not be surprising. However, downward momentum is not as strong as we prefer and EUR is unlikely to ‘accelerate’ lower. Overall, EUR is expected to trade with a ‘downside bias’ for now but is unlikely to challenge the year-to-date low near 1.1100 (there is another support at 1.1155). On the upside, only a move above the strong 1.1260 resistance would indicate that the current downward pressure has eased”.
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