EUR/USD: A deeper pullback should hold at 1.1030 – UOB
|FX Strategists at UOB Group noted that further decline in EUR/USD is likely to meet solid contention in the 1.1030 region.
Key Quotes
24-hour view: “We highlighted yesterday that downward pressure eased but ‘it is too early to expect a sustained recovery’. EUR subsequently traded between 1.1079 and 1.1118, relatively close to our expected sideway-trading range of 1.1075/1.1115. While the retreat from 1.1118 has weakened the underlying tone, any down-move in EUR is expected to encounter strong support at 1.1065. An intraday dip below this level is not ruled out but for today, a sustained decline is unlikely (the next support at 1.1030 is not expected to come into the picture). On the upside, only a move back above 1.1115 would indicate the current mild downward pressure has eased.”
Next 1-3 weeks: As highlighted, there is scope EUR to dip below the strong 1.1065 support but the current weakness Is not viewed as part of a trending down-move and the next support at 1.1030 is likely strong enough to hold any further decline. Taking a step back, we have noted on 03 Jan that EUR ‘is likely in the early stages of a corrective pullback’. From here, the pullback has room to extend lower but lackluster momentum suggests EUR could stabilize ahead of 1.1030. Only a clear break of 1.1030 would increase the risk of a more sustained decline. On the upside, a move above 1.1150 (no change in ‘strong resistance’ level) would suggest the current weakness has stabilized.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.