Euro (EUR) is under mild downward pressure and could edge lower and test 1.1600; a clear break below this level is unlikely. In the longer run, the advance in EUR from late last month has ended; EUR is likely to trade in a range between 1.1580 and 1.1685, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
EUR is likely to trade in a range between 1.1580 and 1.1685
24-HOUR VIEW: “Two days ago, EUR closed slightly lower by 0.05% at 1.1636. Yesterday, we pointed out that ‘the price action did not result in any increase in either downward or upward momentum’. We expected EUR to ‘trade between 1.1615 and 1.1665’. We were not wrong, even though EUR traded within a narrower range than expected (1.1614/1.1657), closing slightly lower at 1.1625 (-0.09%). This time around, there has been a slight increase in downward momentum. Today, EUR could edge lower and test 1.1600. Given the mild downward momentum, a clear break below this level is unlikely. The major support at 1.1580 is also unlikely to come under threat. Resistance is at 1.1640; a breach of 1.1660 would indicate that the current mild downward pressure has eased.”
1-3 WEEKS VIEW: “We have held a positive EUR stance since late last month. In our most recent narrative from two days ago (08 Dec, spot at 1.1645), we indicated 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 has come to an end’. EUR dipped to 1.1615 two days ago, and to 1.1614 yesterday. While our ‘strong support’ level has not been clearly breached yet, upward momentum has faded. From here, we expect EUR to trade in a range, most likely between 1.1580 and 1.1685.”