FX Strategists at UOB Group do not ruled out further weakness in spot, although it should remain within the broad 1.1370/1.1500 range.
Key Quotes
24-hour view: “While EUR cracked several resistance levels with ease and rose to a high of 1.1500, the up-move was not sustained as it dropped back from the high and closed largely unchanged (NY close of 1.1424, -0.02%). Upward pressure has eased and the current movement is viewed as the early stages of a consolidation phase. In other words, EUR is expected to trade sideways for today, likely within a 1.1390/1.1470 range”.
Next 1-3 weeks: “We have held the same view since last Friday (02 Nov, spot at 1.1400) wherein the “immediate bias is for EUR to probe the top of the expected 1.1330/1.1490 consolidation range”. After trading in a relatively quiet manner for several days, EUR briefly rose to a high of 1.1500 during London hours yesterday but the up-move was not sustained as it closed largely unchanged in NY (1.1424, -0.02%). Short-term upward pressure has eased with the pullback from the high and the immediate bias is tilted to the downside. That said, it is too early to expect a sustained decline and any weakness from here is viewed as part of a 1.1370/1.1500 consolidation range. In other words, we continue to expect EUR to trade sideways albeit within a slightly narrower range”.
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