FX Strategists at UOB Group noted that a break above 1.0960 would indicate the start of a consolidative move.
Key Quotes
24-hour view: “We expected EUR to “test the 1.0870 support” yesterday but it only touched 1.0877 before staging a surprisingly robust recovery (overnight high of 1.0942). Downward pressure has dissipated and the 1.0870 level is likely to remain unthreatened for now. From here, the current recovery has scope to extend further but any advance is viewed as a higher trading range of 1.0900/1.0960 (a sustained rise above 1.0960 is not expected)”.
Next 1-3 weeks: “EUR came within sight of 1.0870, the level first indicated last Friday (27 Sep, spot at 1.0920) as it dropped to 1.0877 yesterday. The subsequent sharp and swift rebound came as a surprise and has resulted in a quick loss in downward momentum. The odds for further EUR weakness have diminished. In order to reinvigorate the flagging momentum, EUR has to move and stay below 1.0900 within these 1 to 2 days or a break of 1.0960 would suggest that the weak phase that started early last week has run its course. Looking ahead, a breach of 1.0960 would signify the start of consolidation phase and not the beginning of a major reversal”.
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