Downside momentum loses traction – UOB

In the view of Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group, the downward momentum in EUR/USD appears to be dwindling.

Key Quotes

24-hour view: We expected EUR to trade in a range of 1.0845/1.0900 yesterday. However, EUR rebounded slightly to a high of 1.0913. The mild advance did not result in any significant increase in momentum. We continue to expect EUR to trade in a range, likely between 1.0870/1.0915. 

Next 1-3 weeks: Yesterday (21 Aug, spot at 1.0870), we noted that “downward momentum has increased, albeit just a tad.” We added, “While there is room for EUR to weaken further, the lackluster momentum suggests the pace of any decline is likely to be slow.” EUR rebounded slightly yesterday, and downward momentum is beginning to wane, albeit tentatively. However, only a breach of 1.0930 would indicate that EUR is not ready to head lower to 1.0830.