EUR/USD: Next on the downside emerges 1.0515 – UOB

Pablo Piovano FXStreet

A deeper drop could drag EUR/USD to the 1.0515 zone in the next few weeks, note UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: The sharp selloff that sent EUR plunging to a 6-month low of 1.0629 came as a surprise (we were expecting EUR to trade in a range). While the decline appears to be overdone, the weakness in EUR has not stabilised. Today, EUR could decline further, but it is unlikely to break clearly below 1.0600. Resistance is at 1.0665, a break of 1.0690 would mean that EUR is not weakening further.

Next 1-3 weeks: On Tuesday (12 Sep, spot at 1.0750), we indicated that “the weakness in EUR has stabilised”, and we held the view that EUR “is likely to trade in a range between 1.0690 and 1.0820.” Yesterday (14 Sep, spot at 1.0730), we highlighted that “Looking ahead, if EUR breaks and stays below 1.0690, it will increase the risk of it dropping towards the major support at 1.0635.” In London trade, not only did EUR break below 1.0690, it also dropped slightly below May’s low of 1.0635 (low has been 1.0629). The sharp increase in momentum suggests EUR has resumed its weakness. However, it remains to be seen if there is enough momentum to carry EUR lower March’s low near 1.0515. In order to keep the momentum going, EUR must stay below 1.0730, the current ‘strong resistance’ level. This level will move lower in the coming days.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

GBP/USD: Daily gains remain capped by 1.3650

GBP/USD leaves behind Monday’s pessimism and advances marginally on Tuesday. Cable’s humble gains, however, appear to have met quite a decent resistance in the 1.3650 zone for now, in a context of a slight selling pressure hovering around the Greenback.

EUR/USD struggles to regain pace; gyrates around 1.1670

EUR/USD clinches humble gains around 1.1670 following Tuesday’s close on Wall Street. Indeed, marginal losses in the US Dollar encourages spot to set aside two dauly pullbacks in a row and maintain the 1.1700 barrier on the cross-hairs for now. Moving forward, US inflation tracked by the PCE and another revision of Q2 GDP data should keep investors entertained on Wednesday.

$4700 back on Gold buyers’ radar as US core PCE inflation data looms

Gold is heading back toward the fresh 15-week highs of $4,697 in Wednesday’s Asian trades, reversing a brief dip below the $4,650 level. Gold buyers find renewed strength from a broadly subdued US Dollar (USD), as they look to reposition ahead of the US core Personal Consumption Expenditures (PCE) Price Index data for July.

Bitcoin pauses near $80,000, Ethereum at $2,500, XRP below $1.50

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are facing downside pressure near key psychological thresholds as last week's double-digit rally loses momentum. The pullback reflects near-term corrective measures as traders book profits. Bitcoin trades near $78,760 at press time on Wednesday, maintaining its bullish bias after last week's 23% rally.

America’s self‑inflicted trade wound

I’m conflicted about the trade war that the U.S. has started with Canada. Let’s be clear: any representation that Canada has been taking unfair advantage of the U.S. or that they have been treating us badly for years is a bogus characterization. In reality, the shoe is on the other foot. It’s the U.S. that has been behaving badly.

Canada hits US goods with tariffs; The rate market sees a problem

On September 8, Canada begins charging its own importers 15%, 25% and 50% on roughly 700 lines of American goods. The measure is billed as dollar for dollar, and on the arithmetic of covered trade it is. What it is not is a tax on the United States.