Euro (EUR) is likely to consolidate between 1.1495 and 1.1545. In the longer run, the likelihood of EUR breaking below 1.1470 has increased; EUR must close below 1.1470 before further declines are likely, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Likelihood of EUR breaking below 1.1470 has increased
24-HOUR VIEW: “Last Friday, EUR dropped to a low of 1.1488. Yesterday, Monday, when EUR was at 1.1515, we stated that it ‘could test the 1.1490 level again, but any further decline is unlikely to threaten the major support at 1.1470’. We added, ‘resistance is at 1.1530, followed by 1.1550’. The subsequent price movements did not turn out as expected. EUR dipped to a low of 1.1501, rose to 1.1550, and then pulled back to close slightly higher at 1.1520 (+0.08%). EUR appears to have entered a consolidation phase. Today, we expect EUR to trade between 1.1495 and 1.1545.”
1-3 WEEKS VIEW: “We highlighted last Thursday (20 Nov, spot at 1.1540) that ‘the bias for EUR has shifted to the downside, even though it is currently too early to tell whether it can reach the early-month low, near 1.1470’. After EUR dropped to a low of 1.1488 on Friday, we indicated yesterday (24 Nov, spot at 1.1515) that ‘while the likelihood of EUR breaking below 1.1470 has increased, EUR must close below 1.1470 before further declines are likely’. There is no change in our view. On the upside, if EUR breaks above 1.1570 (no change in ‘strong resistance’ level), it would indicate that the downside bias has faded.”