EUR/USD: Unlikely to break above 1.0900 – UOB Group
The Euro (EUR) could edge higher; it does not seem to have enough momentum to break above 1.0900. In the longer run, slowing momentum suggests 1.0770 is likely out of reach this time around, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
To trade in range after breaking above of 1.0900
24-HOUR VIEW: “After EUR fell sharply last Thursday, we indicated on Friday that ‘conditions are severely oversold after the rapid drop, but today, EUR could test the 1.0800 level before a recovery can be expected.’ However, instead of testing 1.0800, EUR recovered from a low of 1.0823, closing higher by 0.32% at 1.0866. The recovery has gathered some momentum. Today, EUR is likely to edge higher, but it does not seem to have enough momentum to break above 1.0900 (there’s a minor resistance at 1.0885). Support is at 1.0850; a breach of 1.0835 would indicate that the current mild upward pressure has eased.”
1-3 WEEKS VIEW: “Last Thursday (17 Oct, spot t 1.0860), we highlighted that ‘the weakness in EUR that started early this month remains intact.’ We added, ‘To reach the significant support at 1.0770, EUR must keep moving lower, or the likelihood of it reaching this level will diminish quickly.’ EUR subsequently dropped to 1.0810. Last Friday, it rebounded and reached a high of 1.0869. Although our ‘strong resistance’ level at 1.0900 has not been breached yet, the slowing momentum suggests 1.0770 is likely out of reach this time around. Looking ahead, a breach of 1.0900 would indicate the start of a range trading phase.”
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FXStreet Insights Team
FXStreet
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