EUR/USD: Chance to drop to 1.0770 – UOB Group
|Potential for the Euro (EUR) to decline further; it remains to be seen whether 1.0770 is within reach today. In the longer run, downward momentum has not improved much, but there is a chance for EUR to drop to 1.0770 before stabilisation can be expected, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
EUR can stabilize after dropping towards 1.0770
24-HOUR VIEW: “Yesterday, when EUR was at 1.0865, we indicated that it ‘could edge higher, but it does not seem to have enough momentum to break above 1.0900.’ However, instead of edging higher, EUR plummeted, closing lower by 0.47% (1.0815). While downward momentum has not increased by much, there is potential for EUR to decline further. However, it remains to be seen whether 1.0770 is within reach today. Note that there is another support level at 1.0800. On the upside, resistance levels are at 1.0830 and 1.0850.”
1-3 WEEKS VIEW: “After EUR rebounded last Friday, we indicated yesterday (21 Oct, spot at 1.0865) that ‘although our ‘strong resistance’ level at 1.0900 has not been breached yet, the slowing momentum suggests 1.0770 is likely out of reach this time around.’ EUR subsequently reversed and dropped to 1.0810. Despite the relatively sharp decline, downward momentum has not improved much. That said, as long as 1.0880 (‘strong resistance’ level previously at 1.0900) is not breached, there is a chance for EUR to drop to 1.0775 before stabilisation can be expected.”
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