Euro (EUR) is under mild downward pressure; it could dip below 1.0255 but is unlikely to reach the major support at 1.0220. In the longer run, further range trading is likely; decreasing volatility suggests a narrower range of 1.0220/1.0365, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
EUR is under mild downward pressure
24-HOUR VIEW: ” EUR traded in a quiet manner last Thursday, closing largely unchanged at 1.0298. On Friday, when EUR was at 1.0300, we pointed out that ‘the price movements still appear to be part of a consolidation phase.’ We expected EUR to ‘trade in a 1.0270/1.0330 range.’ During NY session, EUR swung between 1.0264 and 1.0330 before closing lower by 0.26% at 1.0271. The price action has resulted in a slight increase in downward momentum. Today, EUR could trade with a downward bias. While it could dip below the support at 1.0255, the major support at 1.0220 is likely out of reach. Resistance is at 1.0305; a break above 1.0320 would indicate that the current mild downward pressure has eased.”
1-3 WEEKS VIEW: “Our most recent narrative was from last Wednesday (15 Jan, spot at 1.0300), wherein EUR ‘has likely entered a range trading phase, and it is likely to trade between 1.0220 and 1.0400 for the time being.’ EUR subsequently traded in a range, but given the decreasing volatility, we expect price movements to be confined to a narrower range of 1.0220/1.0365 for now.”
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