The Euro (EUR) is likely to trade in a relatively broad range, probably between 1.0435 and 1.0535. In the longer run, downward momentum appears to be slowing; the likelihood of EUR breaking below 1.0333 is decreasing, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
Likelihood of EUR breaking below 1.0333 is decreasing
24-HOUR VIEW: “EUR dropped sharply in early Asian trade yesterday. When it was at 1.0465, we indicated that ‘downward momentum appears to be building, albeit tentatively.’ We held the view that it ‘is likely to trade with a downward bias towards 1.0420.’ However, after dropping to 1.0424, EUR soared to 1.0544 before pulling back to close at 1.0486 (-0.08%). The choppy swings provide no clarity. Overall, EUR is likely to trade in a relatively broad range today, probably between 1.0435 and 1.0535.”
1-3 WEEKS VIEW: “In our latest narrative from two days ago (25 Nov, spot at 1.0475), we highlighted that ‘while the weakness in EUR remains intact, it must break and remain below last Friday’s low of 1.0333 before further decline can be expected.’ We added, ‘The likelihood of EUR breaking below 1.0333 is not high, but it will remain intact as long as 1.0560 (‘strong resistance’) is not breached in the next few days.’ Yesterday, EUR rose to 1.0544 then pulled back. While we continue to hold the same view, downward momentum appears to be slowing. Put it another way, the likelihood of EUR breaking below is decreasing.”
