EUR/USD: To trade in a range between 1.0505 and 1.0585 – UOB Group

The Euro (EUR) is likely to trade in a range between 1.0505 and 1.0585. In the longer run, price action continues to suggest EUR weakness; the next support level is at last year’s low, near 1.0450, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

The next support level is at last year’s low, near 1.0450

24-HOUR VIEW: “The following are excerpts from our update last Friday: ‘Conditions remain oversold, but the weakness still has not quite stabilised just yet. That said, as momentum has slowed somewhat, any further decline is likely part of a lower trading range of 1.0490/1.0580. In other words, EUR is unlikely to break clearly below 1.0490.’ Our view of range trading was not wrong, even though EUR traded in a higher range of 1.0516/1.0592, closing at 1.0541 (+0.10%). There has been no increase in either downward or upward momentum, and we continue to expect EUR to trade in a range, probably between 1.0505 and 1.0585.”

1-3 WEEKS VIEW: “We turned negative in EUR on 07 Nov, when EUR was at 1.0730. After EUR fell below our technical target of 1.0500, we indicated last Friday (15 Nov, spot at 1.0525) that ‘The price action continues to suggest EUR weakness, even though caution is warranted given the deeply oversold conditions.’ We added, ‘The next support is at last year’s low, near 1.0450.’ EUR then snapped its 5-day losing streak, closing higher by 0.10% at 1.0541. Although downward momentum has slowed somewhat, only a breach of 1.0610 (no change in ‘strong resistance’ level) would indicate that EUR is not weakening further. Meanwhile, oversold conditions could lead to a couple of days of range trading.”