FX Strategists at UOB Group noted the pair could slip back to the 1.1365 level on a close below 1.1500 the figure.
24-hour view: “EUR touched a high of 1.1619 earlier yesterday (09 Aug) before plummeting to close just above the day’s low of 1.1524 (NY close of 1.1526). From here, the level to focus on is clearly at 1.1505/10 as this level was tested in May and June and held both times. In view of the rapid improvement in downward momentum, there is scope for EUR to break below this level. That said, the current drop appears to be running too fast, too soon and for today, a sustained break below the next support at 1.1480 seems unlikely. Only a move back above 1.1570 would indicate that the current weakness has stabilized (minor resistance is at 1.1550). The 1.1619 high is not expected to come into the picture at all”.
Next 1-3 weeks: “The ‘key resistance’ indicated at 1.1640 remains intact as EUR touched a high of 1.1628 on Wednesday (08 Aug). While the rapid decline from the high bodes well for our view, we are not ‘underestimating’ the major support and are wary that EUR could bounce from around this level. Conversely, a clear break (say a NY close below 1.1500) would indicate that a move to the next major support at 1.1365 has started. All in, we continue to hold a ‘negative’ view on EUR until 1.1610 is taken out (‘key resistance’ previously at 1.1640)”.
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