EUR is likely to trade in a range between 1.1615 and 1.1665. In the longer run, upward momentum is starting to slow; a break below 1.1615 would indicate that EUR is not advancing further, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Upward momentum is starting to slow
24-HOUR VIEW: “EUR closed marginally lower by 0.01% at 1.1642 last Friday. Yesterday, when EUR was at 1.1645, we indicated that ‘momentum indicators remain flat’, and we expected EUR to ‘trade in a range between 1.1625 and 1.1665’. EUR subsequently rose to a high of 1.1671 and then dropped to a low of 1.1615 before recovering to close slightly lower by 0.05% at 1.1636. The price action did not result in any increase in either downward or upward momentum. Today, we expect EUR to trade between 1.1615 and 1.1665.”
1-3 WEEKS VIEW: “We highlighted yesterday (08 Dec, spot at 1.1645) that ‘upward momentum is starting to slow, and if EUR breaks below 1.1615 (‘strong support’ level), it would mean that the advance in EUR that started late last month has come to an end’. EUR subsequently fell and tested the 1.1615 level. As the ‘strong support’ level has not been clearly breached yet, we will maintain the same view for now. That said, unless EUR can break and hold above 1.1665 in the next day or two, a breach of 1.1615 will not be surprising.”