Decline is unlikely to break clearly below 1.0440 – UOB Group

Euro (EUR) may edge lower; as momentum is not strong, any decline is unlikely to break clearly below 1.0440. In the longer run, slight increase in momentum is not enough to signal a sustained decline; EUR must break clearly below 1.0440 first, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

EUR must break clearly below 1.0440 first

24-HOUR VIEW: “We held the view that EUR ‘is likely to trade in a 1.0475/1.0535 range’ yesterday. However, EUR traded choppily between 1.0462 and 1.0530 before settling at 1.0467 (-0.26%). Despite the erratic price movements, there has been a slight increase in downward momentum. Today, EUR may edge lower, but as momentum is not strong for now, any decline is unlikely to break clearly below 1.0440. Resistance is at 1.0490; a breach of 1.0505 would indicate that the mild downward pressure has faded.”

1-3 WEEKS VIEW: “Our latest narrative was from two days ago (11 Dec, spot at 1.0530), wherein ‘the current price movements are likely part of a range trading phase, expected to be between 1.0465 and 1.0610.’ Yesterday, EUR dipped slightly below 1.0465, touching a low of 1.0462. The slight increase in momentum is not enough to signal the start of a sustained decline. Looking ahead, only a clear break below 1.0440 would suggest that EUR is ready to head lower to 1.0400. The likelihood of EUR breaking clearly below 1.0440 appears slim for now, but it will remain intact as long as 1.0540 is not breached.”