EUR/USD: Further decline is unlikely to reach 1.0850 – UOB Group

FXStreet Insights Team FXStreet

Sharp decline in Euro (EUR) vs US Dollar (USD) has room to test 1.0895 before stabilisation is likely; any further decline is unlikely to reach 1.0850. In the longer run, decrease in momentum indicates the chance for EUR to rise has diminished; a breach of 1.0850 would suggest EUR has entered a range-trading phase, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Chance for EUR to rise has diminished

24-HOUR VIEW: "While we expected EUR to 'trade with an upside bias' yesterday, we were of the view that 'any advance might not reach 1.1050.' The subsequent price action did not turn out as we expected. EUR soared to 1.1094 and then plunged to 1.0912 before ending the day largely unchanged at 1.0951 (-0.05%). The sharp decline has room to test 1.0895 before stabilisation is likely. Any further decline is unlikely to reach the strong support at 1.0850. Resistance is at 1.0990, followed by 1.1040."

1-3 WEEKS VIEW: "After EUR pulled back to 1.0881 on Monday, we indicated on Tuesday (08 Apr, spot at 1.0925) that the pullback 'has resulted in a decrease in upward momentum, and the chance for EUR to rise has diminished.' We added, 'a breach of 1.0850 (‘strong support’ level) would indicate that instead of advancing further, EUR has entered a range-trading phase.' Yesterday (Wednesday), EUR rose to 1.1094 and then fell sharply. There has been no further increase in either upward or downward momentum, and we continue to hold the view that as long as 1.0850 is not breached, there is still a slim chance for EUR to rise."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD appears supported by the 200-day SMA, for now

Following an early pullback to multi-week lows near 1.1670, EUR/USD now manages to reclaim the 1.1700 region as the NA session draws to a close on Monday. The steep retracement in spot follows the equally strong move higher in the US Dollar, as investors continue to assess the geopolitical landscape in the wake of the US and Israel attacks on Iran.

GBP/USD hits new yearly lows near 1.3300

GBP/USD adds to the recent bearish tone, approaching to the key 1.3300 support to reach fresh YTD troughs against the backdrop of the robust performance of the US Dollar. Indeed, Cable’s decline comes amid the firm demand for the safe-haven space in the wake of the US and Israel attacks to Iran.

Gold eases some ground, approaches $5,300

Gold now surrenders part of the earlier advance, reshifting its attenton to the $5,300 zone per troy ounce at the beginning of the week. Indeed, the yellow metal’s firm performance appears propped up by incresing geopolitical jitters in the Middle East, which at the same time fuels the demand for the safe-haven space.