The Euro (EUR) is expected to trade between 1.1000 and 1.0050. In the longer run, to continue to decline, EUR not only has to break below 1.1000, but also the next solid support at 1.0980, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.
EUR has to break below 1.1000 to continue falling
24-HOUR VIEW: “Two days ago, we expected EUR to ‘continue to weaken,’ but we pointed out that ‘any decline is likely limited to a test of 1.1030.’ After EUR dropped to a low of 1.1032, we highlighted yesterday that “the weakness has not stabilised, and EUR could edge lower but is unlikely to be able to break 1.1000.” Our view turned out to be correct, as EUR dropped to 1.1006, recovering to close at 1.1031 (-0.13%). While downward momentum is slowing and conditions remain rather oversold, there is no indication of a sustained rebound yet. Today, we expect EUR to trade between 1.1000 and 1.0050. Even if it can break below 1.1000, there is another major support at 1.0980.”
1-3 WEEKS VIEW: “On Wednesday (02 Oct), when EUR was trading at 1.1065), we noted the “rapid buildup in downward momentum.” We were of the view that this “is likely to lead to EUR weakness, and the levels to monitor are 1.1030 and 1.1000.” Yesterday, EUR broke below 1.1030, reaching a low of 1.1006. To continue to decline, EUR not only has to break below 1.1000 but also the next solid support at 1.0980. Looking ahead, the next level to watch below 1.0980 is 1.0935. Overall, we will continue to view EUR negatively as long as it remains below 1.1090 (‘strong resistance’ level previously at 1.1120).”
