EUR/USD: Bias tilted to the downside – UOB Group
|Bias for the Euro (EUR) is tilted to the downside; given the mild momentum, any decline is unlikely to break clearly below 1.0900. In the longer run, outlook for EUR remains negative; slowing momentum suggests that the probability of breaking the 1.0860/1.0885 support zone is not high, UOB Group’s FC analysts Quek Ser Leang and Lee Sue Ann note.
EUR can break the 1.0860/1.0885 support zone
24-HOUR VIEW: “After EUR dropped briefly to 1.0898, then rebounded, we indicated last Friday that ‘the rebound in oversold conditions and slowing momentum suggests that instead of weakening further, EUR is more likely to trade in a range, probably between 1.0910 and 1.0960.’ While our view of range trading was not wrong, EUR traded in a much narrower range of 1.0925/1.0953, closing largely unchanged at 1.0937 (+0.02%). Downward momentum has increased slightly, and the bias for today is tilted to the downside. Given the mild momentum, any decline is unlikely to break clearly below 1.0900. The next support at 1.0885 is unlikely to come under threat. Resistance levels are at 1.0945 and 1.0960.”
1-3 WEEKS VIEW: “Not much has happened since our update on Friday (11 Oct, spot at 1.0935). As highlighted, while the outlook for EUR remains negative, downward momentum appears to be slowing, and the probability of EUR breaking the significant support zone between 1.0860 and 1.0885 is not high. However, only a breach of 1.0980 (‘strong resistance’ level was at 1.0995 last Friday) would mean that the weakness in EUR that started early in the month has stabilised.”
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