EUR/USD: Weakness in EUR has stabilised – UOB Group
Brief decline did not result in any increase in momentum; the Euro (EUR) is expected to trade in a range between 1.0550 and 1.0620. In the longer run, weakness in EUR has stabilised; it is expected to consolidate between 1.0520 and 1.0685, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
EUR to consolidate between 1.0520 and 1.0685
24-HOUR VIEW: “Following EUR rise to 1.0607 on Monday, we indicated yesterday that ‘instead of continuing to rise, EUR is likely to trade in a 1.0560/1.0610 range today.’ Although EUR subsequently plummeted to 1.0523, it rebounded quickly to close largely unchanged at 1.0595 (-0.04%). The brief decline did not result in any increase in momentum. We continue to expect EUR to trade in a range, likely between 1.0550 and 1.0620.”
1-3 WEEKS VIEW: “We have held a negative view in EUR for about two weeks. Yesterday (19 Nov, spot at 1.0590), we noted that ‘downward momentum is beginning to fade.’ We stated, ‘A clear break of 1.0610 (‘strong resistance’ level) would mean that EUR has entered a consolidation phase.’ EUR then dropped to 1.0523, rebounded quickly to 1.0600, closing at 1.0595. While our ‘strong resistance’ level at 1.0610 has not been breached yet, downward momentum has eased considerably. To put it another way, the EUR weakness has stabilised. From here, EUR is likely to consolidate, expected to be between 1.0520 and 1.0685.”
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