FX Strategists at UOB Group remain neutral on the pair, allowing a potential test of the 1.1820 area.
24-hour view: “In line with expectation, EUR extended its decline to 1.1845/50 but the down-move was checked by the strong 1.1820 support (low has been 1.1836). The strong rebound from the low however, came as a surprise. The recovery appears incomplete and further EUR strength towards 1.1955 seems likely. The next level at 1.1995 is a major level and is unlikely to be challenged. Support is at 1.1885 followed by 1.1855. The 1.1838 low is likely ‘safe’ for now”.
Next 1-3 weeks: “We just turned neutral yesterday and held the view that EUR is under “immediate downward pressure towards 1.1820”. EUR dipped to a low of 1.1836 before rebounding strongly. Despite the recovery, the undertone is still weak and there is still a good chance that we may see another attempt to move towards 1.1820. However, as highlighted yesterday, a sustained move below the next support at 1.1770 is not expected. On the upside, only a move back above 1.1995 would indicate that the downward pressure has eased”.
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