EUR/USD remains on the downside – UOB Group
|Risk for Euro (EUR) remains on the downside against US Dollar (USD); lackluster momentum continues to suggest that 1.1625 is likely out of reach. In the longer run, the risk of EUR declining to 1.1625 is increasing, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
1.1625 is likely out of reach
24-HOUR VIEW: "In the early Asian session yesterday, when EUR was at 1.1675, we stated that 'the risk for EUR is on the downside.' However, we noted that 'it does not appear to have enough momentum to reach the major support at 1.1625.' We also pointed out that 'resistance is at 1.1700, followed by 1.1720.' EUR then rose to 1.1697, dipped to 1.1653, and then closed at 1.1663 (-0.22%). While the risk for EUR remains on the downside, the lackluster momentum continues to suggest that 1.1625 is likely out of reach (there is a minor support at 1.1640). On the upside, resistance levels are at 1.1685 and 1.1705."
1-3 WEEKS VIEW: "We have held a negative EUR view since early last week. In our latest narrative from last Friday (11 Jul, spot at 1.1685), we highlighted that 'although there is still no significant increase in momentum, only a breach of 1.1755 (‘strong resistance’ level) would indicate that the current downward risk has faded.' We also highlighted that 'until then, if EUR were to close below 1.1660, it could potentially trigger a move to 1.1625.' Although EUR closed at 1.1663 yesterday, the risk of EUR declining to 1.1625 is increasing. The downside risk will increase in the coming days as long as the ‘strong resistance’ at 1.1735 (level previously at 1.1755) is not breached."
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