In opinion of FX Strategists at UOB Group, the upside momentum in EUR/USD has subsided and now looks to 1.1590.
24-hour view: “We highlighted yesterday that the ‘the bias for EUR is on the upside but any advance is unlikely to challenge the major resistance at 1.1680’. EUR subsequently rose to 1.1667 before staging a surprisingly sharp pullback (low of 1.1618 in NY). The pullback from the high appears to have room to extend but a break of the strong support at 1.1590 is unlikely (there is another support at 1.1605). On the upside, a breach of 1.1650 would indicate that the downward pressure has eased (minor resistance is at 1.1635).”
Next 1-3 weeks: “Two days ago (20 Oct, spot at 1.1630), we highlighted that EUR could consolidate for a couple of days first but it is likely to head to the next major resistance at 1.1680 later on. Yesterday (21 Oct), EUR rose to 1.1667 before pulling back quickly. Upward momentum has eased and a break of 1.1590 (no change in ‘strong support’ level) would indicate that 1.1680 is out of reach this time round. In order to rejuvenate the flagging momentum, EUR has to move and stay above 1.1650 within these 1 to 2 days or a break of 1.1590 would not be surprising.”
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