According to FX Strategists at UOB Group, the pair remains biased for a test of the lower bound of the 1.1470/1.1640 range.
Key Quotes
24-hour view: “EUR lurched lower after the strong US jobs data and plunged to a low of 1.1548 last Friday before ending the day on a weak note (NY close of 1.1555). The sharp decline appears to have enough momentum to dip below last week's 1.1527 low but at this stage, a clear break of 1.1500 seems unlikely. Resistance is at 1.1585 but only a break of 1.1610 would indicate that the current downward pressure has eased”.
Next 1-3 weeks: “Our recent expectation for EUR to extend its rebound was proven wrong as it plummeted last Friday and hit a low of 1.1548. While the low was just above the 1.1530 ‘key support’, the weak daily closing in NY is enough to indicate that the recent mild upward pressure has eased. From here, the underlying tone has weakened but it is premature to expect the start of a sustained decline in EUR. The outlook is still deemed as neutral even though the immediate bias is for EUR to probe the bottom of the expected 1.1470/1.1640 consolidation range”.
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