The pair remains neutral and is expected to extend the sideline theme in the upper end of the range, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “Expectation for EUR to trade sideways yesterday was wrong as it cracked the strong 1.1450 support and dropped to a low of 1.1429. The decline was however short-lived as EUR rebounded quickly and ended the day unchanged (NY close of 1.1489, 0.00%). The underlying tone has improved and the immediate bias is on the upside. From here, a test of 1.1535 would not be surprising but the next resistance at 1.1560 is likely out of reach. Support is at 1.1475 followed by 1.1450. The 1.1429 low is expected to be strong enough to hold any intraday weakness”.
Next 1-3 weeks: “EUR finally cracked the 1.1450 support and dropped to a low of 1.1429 but the decline was short-lived as it rebounded strongly to end the day unchanged (NY close of 1.1489, 0.00%). We previously held the view that “a break of 1.1450 would shift the focus to 1.1390″ but yesterday’s price action suggests that our expectation for further EUR weakness is unlikely to pan out. In other words, the ‘negative’ phase in EUR that started about two weeks ago (28 Sep, spot at 1.1640) has likely run its course and the 1.1429 low is deemed as a short-term bottom. That said, the outlook remains as neutral and EUR is expected to trade sideways to slightly higher in the coming days, likely within a 1.1450/1.1620 range”.
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