Euro (EUR) is expected to trade in a range between 1.1690 and 1.1760 against US Dollar (USD). In the longer run, EUR strength from late last month has ended; the current pullback could extend to 1.1660, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
EUR strength from late last month has ended
24-HOUR VIEW: “On Monday, EUR dropped to a low of 1.1686 and then rebounded. Yesterday (Tuesday), when EUR was at 1.1745, we highlighted that ‘the rebound could extend, but after the sharp decline yesterday, any advance is likely limited to a test of 1.1780.’ However, EUR rebounded less than expected to 1.1765 before dropping sharply to a low of 1.1682. EUR recovered from the low to close at 1.1724, up 0.15%. The price action did not result in any increase in either downward or upward momentum. Today, we expect range trading, most likely between 1.1690 and 1.1760.”
1-3 WEEKS VIEW: “We revised our view from positive to negative yesterday (08 Jul, spot at 1.1745). We highlighted the following: ‘The EUR strength from late last month has ended. While there has been no significant increase in downward momentum, the current pullback in EUR could extend to 1.1660. However, if EUR breaks above 1.1810 (‘strong resistance’ level), it would mean that it is more likely to trade in a range instead of pulling back.’ Our view remains intact, but we are lowering the ‘strong resistance’ from 1.1810 to 1.1795.”
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