FX Strategists at UOB Group remain neutral on the pair and note there is still room for another test of 1.1790.
24-hour view: “Expectation for sideway trading yesterday was wrong as EUR dropped to a low of 1.1688 before rebounding. Despite the recovery, the underlying tone remains on the soft side and a retest of the strong 1.1680/90 support zone seems likely. From here, the prospect for a sustained decline below this support zone is not high (next support is at 1.1650). On the upside, only a move back above 1.1760 would indicate that the current soft patch in EUR has stabilized (the next level at 1.1790 is a major resistance and is unlikely to come into the picture for today)”.
Next 1-3 weeks: “After failing to break above the strong 1.1790 resistance on Monday, EUR dipped to a low of 1.1688 yesterday, not far from our ‘key support’ at 1.1680. As highlighted yesterday, a break of 1.1680 would indicate that EUR has made a temporary top at 1.1790. Until then, EUR could still stage another attempt to break above 1.1790 but this has to happen within these 1 to 2 days as a prolonged consolidation around these levels would lead to a rapid loss in upward momentum. Looking ahead, a break of 1.1680 would indicate that EUR has moved into a broad sideway trading range (and not the start of a bearish phase)”.
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