The pair keeps the neutral stance although it could still rebound to the 1.1900 level, according to FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted yesterday that the underlying tone for EUR has weakened but added “any decline is unlikely to move clearly below 1.1725”. In line with expectation, EUR dropped and touched a low of 1.1731 before staging a modest rebound. Downward momentum has picked up and the immediate bias is still on the downside. That said, 1.1690 is a major support and this level is likely out of reach (minor support is at 1.1715). On the upside, only a move back above 1.1795 would indicate the current mild downward pressure has eased (minor resistance is at 1.1775)”.
Next 1-3 weeks: “We have held the same view since last Thursday (07 Jun, spot at 1.1775) that “a stronger corrective rebound to 1.1900 is not ruled out”. Since then, EUR has been trading sideways, holding roughly between 1.1725 and 1.1840. While the mild upward pressure has eased somewhat, we still see chance for a stronger recovery as long as the ‘key support’ at 1.1690 is intact. That said, EUR has to start moving higher within these few days as a prolonged consolidation around these levels would lead to a rapid loss in upward pressure. Looking ahead, a breach of 1.1690 would not change the current neutral outlook but indicate that EUR would continue to trade sideways within a broad range”.
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