EUR/USD under pressure, focus on 1.0970 – UOB

FX Strategists at UOB Group noted EUR/USD remains under pressure but a breach of the 1.0970 level looks unlikely in the near term.

Key Quotes

24-hour view: “Instead of “trading sideways”, EUR drifted lower and tested the strong 1.1000 support (low of 1.1001). Despite making fresh low, the decline lacks momentum and the risk of a sustained drop below 1.1000 is not high. That said, EUR could try to move below 1.1000 again but for today, the next support at 1.0970 is not expected to come into the picture. On the upside, only a move above 1.1045 would indicate the current mild downward pressure has eased (minor resistance is at 1.1030)”.

Next 1-3 weeks: “One week ago (06 Nov, spot 1.1075), we highlighted that EUR “is likely in a corrective pull-back towards 1.1000″. Since then, EUR has declined and came within 1 pip of 1.1000 yesterday (12 Nov) as it touched 1.1001. Despite making fresh low, downward momentum has not improved by much. However, further EUR weakness is not ruled out but as highlighted on Monday (11 Nov, spot at 1.1020), there is “another strong support at 1.0970 and only a clear break of this level would suggest EUR is ready to tackle 1.0930″. In view of the lackluster momentum, the prospect for a sustained decline below 1.0970 is not high. That said, the current downward pressure is deemed as intact unless EUR can move above 1.1065 (‘strong resistance’ level was previously at 1.1090)”.