FX Strategists at UOB Group noted that only a surpass of 1.1200 could remove some downside pressure in EUR/USD.
Key Quotes
24-hour view: “We expected EUR to trade within Thursday’s 1.1100/1.1187 last Friday. In line with expectation, EUR traded between 1.1110 and 1.1150. Indicators are still mostly ‘flat’ which suggest EUR could continue to trade sideways for now, likely between 1.1105 and 1.1155″.
Next 1-3 weeks: “EUR dropped below 1.1106 and touched a fresh year-to-date low of 1.1100 before rebounding quickly. The price action was not unexpected as we highlighted on Wednesday (24 Jul, spot at 1.1155) that a “fresh year-to-date low would not be surprising”. We also indicated that “what is less clear is whether any weakness below this level is sustainable”. For now, it is too early to tell whether EUR could move and stay below 1.1100 and only a break of the 1.1200 ‘key resistance’ (no change in level from yesterday) would indicate that the current downward pressure has eased. Meanwhile, after yesterday’s hectic price action, EUR could consolidate and trade sideways for a few days. Looking forward, if EUR were to registered a NY closing below 1.1100, it would greatly increase the risk of a break of the next support at 1.1045″.
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