EUR/USD: Downside risk for EUR has increased – UOB Group
Euro (EUR) could dip below 1.1645; given the oversold conditions, any further decline may not reach 1.1610. In the longer run, downside risk for EUR has increased; if it breaks clearly below 1.1645, it would then likely threaten the significant support at 1.1610, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Below 1.1645, EUR can threaten the significant support at 1.1610
24-HOUR VIEW: "Our view for EUR to 'trade in a range of 1.1690/1.1730' was incorrect. Instead of trading in a range, EUR dropped and tested the major support at 1.1645 (low was 1.1647). EUR closed on a soft note at 1.1655, down by 0.46%. The decline is oversold, but with no sign of stabilisation just yet, EUR could dip below 1.1645 today. Given the oversold conditions, any further decline may not reach the next major support at 1.1610. To maintain the oversold momentum, EUR must hold below 1.1690, with minor resistance at 1.1675."
1-3 WEEKS VIEW: "Yesterday (07 Oct, spot at 1.1710), we indicated that 'there is scope for EUR to test the late-Sep low of 1.1645.' However, we pointed out that 'it is unclear whether EUR can break clearly below this level.' We did not quite expect EUR to test 1.1645 so soon, as it dropped to a low of 1.1647. The downside risk for EUR has increased. If EUR breaks and holds below 1.1645, it would then likely threaten the significant support at 1.1610. Overall, only a breach of 1.1720 (‘strong resistance’ level was at 1.1755 yesterday) would indicate that the downside risk in EUR has eased."
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FXStreet Insights Team
FXStreet
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