The Euro (EUR) could decline further, but it is not clear for now if it can break the significant support level at 1.0640. But if it breaks below this level, a sustained EUR decline is possible, UOB Group analysts note.
EUR to stabilize above 1.0730
24-HOUR VIEW: “Two days ago, EUR fell to 1.0689 and then rebounded. Yesterday, we pointed out that ‘there has been a slight increase in momentum.’ We indicated that EUR ‘could dip below the 1.0689 low, but the major support at 1.0670 is unlikely to come under threat.’ The anticipated decline exceeded our expectations as EUR fell to a low of 1.0664. Today, EUR could decline further, but it is not clear for now if it can break the significant support level at 1.0640. Note that 1.0665 is still a rather strong support level. Resistance is at 1.0695; a breach of 1.0710 would mean that the weakness in EUR has stabilised.”
1-3 WEEKS VIEW: “Our latest narrative was from two days ago (25 Jun, spot at 1.0730), wherein EUR ‘has likely entered a consolidation phase and it is likely to trade between 1.0670 and 1.0800.’ Yesterday, EUR fell to a low of 1.0664. Downward momentum is building again, but at this stage, it does not appear to be enough to suggest the start of a sustained decline. Furthermore, there is a significant support level at 1.0640. That said, provided that 1.0730 is not breached, EUR is likely to remain under pressure, but a sustained decline is likely only if it can break clearly below 1.0640.”
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