FX Strategists at UOB Group believe there is still room for a visit to the 1.1100 neighbourhood in the near term.
Key Quotes
24-hour view: “Expectation for EUR to “dip below 1.1100” did not materialize as it rebounded strongly to a high of 1.1181. While there is not much improvement in upward momentum, the recovery has scope to test the strong 1.1190 resistance. A move above this level would not be surprising but in view of the lackluster momentum, a break of the next resistance at 1.1215 appears highly unlikely. Support is at 1.1145 followed by 1.1120. The 1.1100 level is acting as a solid support now and is not expected to come into the picture”.
Next 1-3 weeks: “As highlighted, the underlying tone in EUR has weakened but EUR has to register a daily closing below the major 1.1100/05 support level in order to indicate that a move to 1.1050 has started. In view of the lackluster momentum, the prospect for such a scenario is not high but EUR has to move above 1.1190 (level was at 1.1205 yesterday) in order to indicate that the current mild downward pressure has eased. Meanwhile, EUR is expected to trade with a downside bias and test 1.1100/05”.
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