FX Strategists at UOB Group noted EUR/USD risks further retracements below the 1.1170 level in the near-term.
24-hour view: “We highlighted the mixed outlook in EUR yesterday and expected it ‘to trade in a choppy manner and within a broad range of 1.1200/1.1280’. EUR subsequently traded between 1.1189 and 1.1261 before closing largely unchanged at 1.1231 (-0.08%). The outlook still appears to be mixed and EUR could trade sideways for today, likely between 1.1200 and 1.1270.”
Next 1-3 weeks: “We highlighted last Friday (26 Jun, spot at 1.1220) that ‘downward pressure has ticked up but EUR has to close below 1.1170 before a more sustained decline can be expected’. We added, ‘the prospect for such a move is not high but it would continue to increase unless EUR moves and stays above 1.1300 within these 1 to 2 days’. EUR popped to a high of 1.1288 yesterday (29 Jun) before easing off quickly. Downward pressure has eased somewhat but only a break of 1.1300 would indicate that the downside risk has dissipated (and that EUR is still trading in a broad 1.1170/1.1380 range). In other words, there is no change in our view from last Friday.”
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