EUR/USD: Current corrective pullback has a chance to reach 1.0945 – UOB Group
|Euro (EUR) could rebound further vs US Dollar (USD), but any advance is likely part of a higher range of 1.1125/1.1225. In the longer run, EUR remains under pressure, but it remains to be seen if the current corrective pullback can reach 1.0945, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
EUR remains under pressure
24-HOUR VIEW: "Two days ago, EUR plunged by 1.42% to close at 1.1087. Yesterday, when it was at 1.1095, we noted that 'the sharp and swift selloff is deeply oversold.' However, we pointed out, 'With no signs of stabilisation just yet, there is scope for EUR/USD to weaken further, but any decline is unlikely to break the major support at 1.1055.' We were incorrect. Instead of weakening, EUR rebounded to a high of 1.1194. While EUR could rebound further today, any advance is likely part of a higher range of 1.1125/1.1225. To put it another way, any advance is unlikely to break clearly above 1.1225."
1-3 WEEKS VIEW: "Last Friday (09 May, spot at 1.1220), we indicated that 'buildup in momentum indicates further declines in EUR toward 1.1145.' After EUR plummeted on Monday, we highlighted yesterday (13 May, spot at 1.1095) that EUR “remains under pressure, but it remains to be seen if the current corrective pullback can reach 1.0945.' We continue to hold the same view, but after the subsequent rebound, the likelihood of EUR pulling back further to 1.0945 has decreased. Conversely, a break above 1.1225 (no change in ‘strong resistance’ level from yesterday) would mean that EUR has entered a consolidation phase."
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