Set to test 1.0995 before the risk of recovery increases – UOB Group

Scope for the Euro (EUR) to test 1.0995 before the risk of recovery increases. In the linger run, EUR is likely to continue to weaken; the next level to watch below 1.0995 is at 1.0960, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

Set to fall to 1.0960 below 1.0995

24-HOUR VIEW: “Yesterday, we held the view that EUR could break below last week’s low of 1.1025. We were also of the view that ‘the next support at 1.0995 could be out of reach for now.’ We were not wrong as EUR dropped to 1.1014 before closing at 1.1019 (-0.14%). While downward momentum has only increased slightly, there is scope for EUR to test 1.0995 before the risk of a recovery increases. The next major support at 1.0960 is unlikely to come under threat. Resistance levels are at 1.1045 and 1.1065.”

1-3 WEEKS VIEW: “Two days ago (09 Sep, spot at 1.1085), we highlighted that EUR could retest the 1.1025 level. Yesterday (10 Sep, spot at 1.1035), we indicated that ‘if EUR breaks below 1.1025, it could decline further to 1.0995.’ EUR then fell, reaching a low of 1.1014. While there has been no significant increase in momentum, EUR is likely to continue to weaken. The next level to watch below 1.0995 is at 1.0960. Overall, only a breach of 1.1085 (‘strong resistance’ level was at 1.1105 yesterday) would mean that EUR is not weakening further.”