FX Strategists at UOB Group remain neutral on spot and see it navigating within the 1.1590/1.1760 range in the near term horizon.
24-hour view: “We expected a lower EUR yesterday but were of the view that a move below the 1.1630 support is unlikely. EUR subsequently touched a low of 1.1647 before staging a modest recovery. The undertone still appears to be on the soft side and from here; there is scope for a test of the 1.1630 support. At this stage, we do not anticipate the next support at 1.1590 to come into the picture. Only a move back above 1.1695 would indicate that the current mild downward pressure has eased (next resistance is at 1.1720)”.
Next 1-3 weeks: “There is not much to add as EUR traded within a relatively narrow range yesterday and ended the day unchanged (closed at 1.1671 in NY, 0.00%). The neutral phase that started last month remains intact and for the next one week or so, we continue to expect EUR to trade sideways, likely between 1.1590 and 1.1760. Looking further out, even if EUR were to move out the expected 1.1590/1.1760 consolidation range, ‘neutral’ indicators suggest that the prospect for a break out of last month’s 1.1507/1.1850 range is low. In other words, we expect EUR to stay between 1.1507 and 1.1850 for the next several weeks”.
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