According to FX Strategists at UOB Group, a drop to 1.1530 in EUR/USD now seems to have lost some traction.

Key Quotes

24-hour view: “Last Friday, we highlighted that ‘the weakness in EUR does not appear to have stabilized but any decline is unlikely to challenge the major support at 1.1530’. However, EUR traded between 1.1561 and 1.1607 before closing on 1.1594. Downward pressure has eased and EUR is likely to trade sideways for today, expected to be within a 1.1575/1.1635 range.”

Next 1-3 weeks: “We have expected a weaker EUR since early last week. In our update from last Friday (01 Oct, spot at 1.1575), we highlighted that ‘downward momentum has slowed somewhat and while EUR could decline further, the major and strong support at 1.1530 may not be easy to break’. EUR subsequently rebounded to 1.1607 before closing at 1.1594 (+0.11%). Downward momentum has slowed further and a break of 1.1655 (no change in ‘strong resistance’ level) would indicate that the weakness in EUR has run its course. In other words, the odds for EUR to move to 1.1530 have diminished.”

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