EUR/USD now risks a move to 1.1000 – UOB

Pablo Piovano FXStreet

In opinion of FX Strategists at UOB Group, EUR/USD could now slip back and test the 1.10 region in the next weeks.

Key Quotes

24-hour view: “While we held the view yesterday “the risk is on the downside”, the anticipated “solid support at 1.1090” did not materialize as EUR plummeted to a low of 1.1062 during NY hours. The rapid drop is running ahead of itself and while EUR could dip to 1.1050, a sustained decline below this level is unlikely (next support at 1.1020). Resistance is at 1.1100 followed by the stronger level near 1.1125. Yesterday’s peak at 1.1140 is not expected to come into the picture”.

Next 1-3 weeks: “While we cautioned yesterday (05 Nov, spot at 1.1125) that the “odds for further EUR strength have diminished”, the sharp drop in EUR that easily cracked the 1.1090 ‘strong support’ level and the subsequent weak daily closing at 1.1074 came as a surprise (the -0.47% decline is the largest 1-day drop in 6 weeks). The positive phase in EUR that started about one month ago has ended and the current weakness is viewed as a corrective pullback (and not a major reversal). For the next couple of weeks, EUR is likely to trade with a downside bias towards 1.1000. At this stage, a sustained decline below this level is not expected. Resistance is at 1.1125 but only a 1.1140 (‘strong resistance’ level) would indicate our view for a pull-back is incorrect”.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD climbs to daily highs on US CPI

EUR/USD now accelerates it rebound and flirts with the 1.1880 zone on Friday, or daily highs, all in response to renewed selling pressure on the US Dollar. In the meantime, US inflation figures showed the headline CPI rose less than expected in January, removing some tailwinds from the Greenback’s momentum.

GBP/USD clings to gains above 1.3600

GBP/USD reverses three consecutive daily pullbacks on Friday, hovering around the low-1.3600s on the back of the vacillating performance of the Greenback in the wake of the release of US CPI prints in January. Earlier in the day, the BoE’s Pill suggested that UK inflation could settle around 2.5%, above the bank’s goal.

Gold: Upside remains capped by $5,000

Gold is reclaiming part of the ground lost on Wednesday’s marked retracement, as bargain-hunters seem to have stepped in. The precious metal’s upside, however, appears limited amid the slightly better tone in the US Dollar after US inflation data saw the CPI rise less than estimated at the beginning of the year.