EUR/USD: Risk of breaking the major support at 1.1660 is increasing – UOB Group

Risk of Euro (EUR) breaking the major support at 1.1660 against US Dollar (USD) is increasing; the next support at 1.1625 is probably out of reach. In the longer run, if EUR were to close below 1.1660, it could potentially trigger a move to 1.1625, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Below 1.1660, EUR may potentially move to 1.1625

24-HOUR VIEW: "We noted yesterday that 'there has been a slight increase in upward momentum.' However, we indicated that 'while this is likely to lead to EUR edging higher, we view any advance as part of a higher range of 1.1700/1.1755.' The subsequent price movements did not turn out as expected. EUR rose to a high of 1.1749, then plummeted to 1.1661 before quickly rebounding. EUR closed at 1.1700 (-0.16%) in NY. After falling in the early Asian session today, the risk of EUR breaking the major support at 1.1660 is increasing, even though the next support at 1.1625 is probably out of reach for now. The downside risk will remain intact provided that 1.1720 (minor resistance is at 1.1700) is not breached."

1-3 WEEKS VIEW: "On Tuesday (08 Jul, spot at 1.1745), we highlighted that 'while there has been no significant increase in downward momentum, the current pullback in EUR could extend to 1.1660.' After EUR subsequently traded in a quiet manner, we indicated yesterday (10 Jul, spot at 1.1725) that 'as long as the ‘strong resistance’ at 1.1780 remains intact, there is still a chance (albeit a limited one) for EUR to pull back to 1.1660.' EUR then dipped to 1.1661 before rebounding. Although there is still no significant increase in momentum, only a breach of 1.1755 (‘strong resistance level previously at 1.1780) would indicate that the current downward risk has faded. Until then, if EUR were to close below 1.1660, it could potentially trigger a move to 1.1625."