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The outlook on the pair remains neutral, while a breakdown of 1.1297 appears to have lost some momentum for the time being, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted last Friday “a dip below 1.1350 is not ruled out but any weakness is viewed as a lower trading range of 1.1335/1.1410″. EUR subsequently dipped to 1.1332 but recovered quickly to hit a high of 1.1420 during late NY hours. Downward pressure has clearly eased and the current movement is viewed as part of a corrective recovery phase. The correction has scope to extend higher but the major 1.1450 resistance is likely out of reach (1.1430 is already quite a strong level). Support is at 1.1375 followed by 1.1350. The 1.1332 low is expected to be ‘safe’ for now”.

Next 1-3 weeks: “After holding a ‘negative’ EUR view for more than a week we warned last Friday (26 Oct, spot at 1.1375), “short-term indicators are at severely oversold levels and it is unlikely EUR can maintain the pace of its current decline”. We added, “a dip below 1.1350 is not ruled out but at this stage, the prospect for a sustained break below the year-to-date low of 1.1297 is not that high”. EUR dipped to a low of 1.1332 during London hours on Friday before staging a robust rebound and closed higher for the day (NY close of 1.1401, +0.23%). The price action reinforces our view and we continue to see low risk for a break of 1.1297. That said, only a move above the 1.1450 ‘key resistance’ (no change in level) would indicate that the ‘negative’ phase has ended and a short-term bottom is in place”.