EUR/USD: Moving towards 1.1040 – UOB Group

The Euro (EUR) is expected to trade in a range between 1.1040 and 1.1200, UOB Group analysts Quek Ser Leang and Lee Sue Ann note.

Rangebound in the 1.1040/1.1200 range

24-HOUR VIEW: "Our expectation for EUR to edge above 1.1200 yesterday was incorrect, as it fell sharply, closing lower by 0.57% (1.1120), its biggest 1- day drop in 2-1/2 months. The sharp and swift drop seems to be overextended, but there is room for EUR to decline further to 1.1095 before stabilisation is likely. The major support at 1.1040 is unlikely to come under threat. Resistance is at 1.1145, followed by 1.1165.”

1-3 WEEKS VIEW: “After EUR soared last Friday, we indicated on Monday (26 Aug, spot at 1.1185) that ‘the boost in momentum has increased the likelihood of EUR reaching 1.1275.’ We indicated that we ‘will hold the same view provided that the ‘strong support’ at 1.1105 is not breached.’ Yesterday, EUR fell sharply, tumbling to a low of 1.1104. While our ‘strong support’ level was only slightly breached, upward momentum has largely dissipated. For now, we expect EUR to trade in a range between 1.1040 and 1.1200. Looking ahead, as long as it does not break clearly below 1.1040, there is still chance for EUR to rise above 1.1200 later on.”