There is a chance for Euro (EUR) to test, and potentially dip below 1.1585 against US Dollar (USD); any further decline is unlikely to reach 1.1540. In the longer run, for the time being, EUR is likely to trade in a range between 1.1540 and 1.1685, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
EUR might test, and potentially dip below 1.1585
24-HOUR VIEW: “Yesterday, when EUR was at 1.1645, we indicated that ‘the current price movements are likely part of a range trading phase, most likely between 1.1610 and 1.1670.’ The subsequent price action did not turn out as expected. EUR rose to 1.1675 and then staged a surprisingly sharp drop that reached a low of 1.1589. It then closed at 1.1614, down by 0.21%. There has been an increase in downward momentum, albeit not much. Today, there is a chance for EUR to test, and potentially dip below 1.1585. Based on the current momentum, any further decline is unlikely to reach 1.1540. Resistance is at 1.1635, followed by 1.1665.”
1-3 WEEKS VIEW: “The following are from our update yesterday: ‘In our latest narrative from last Thursday (07 August, spot at 1.1655), we highlighted that EUR ‘is likely to trade with an upward bias, but it is unclear for now if it can reach 1.1720. We will maintain the same view as long as the ‘strong support’ at 1.1585 (no change in ‘strong support’ level) is not breached.’ EUR then fell and reached a low of 1.1589 in the NY session. Although our ‘strong support’ level has not been clearly breached yet, upward pressure has largely eased. EUR has likely entered a consolidation phase. For the time being, we expect EUR to trade between 1.1540 and 1.1685.”
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