The Euro (EUR) could break 1.1025; the next support at 1.0995 could be out of reach for now. In the longer run, if EUR breaks below 1.1025, it could decline further to 1.0995, UOB Group FX strategists Quek Ser Leang and Peter Chia note.
Below 1.1025 EUR may test 1.0995
24-HOUR VIEW: “Last Friday, EUR traded choppily. Yesterday, we indicated that ‘despite the choppy price movements, the underlying tone seems to have softened somewhat.’ We expected EUR to ‘edge lower, possibly testing the 1.1055 level.’ However, we pointed out that ‘last week’s low of 1.1025 is unlikely to come into view.’ Our expectations were not wrong, even though EUR fell more than expected, reaching a low of 1.1033. Given that downward momentum has increased further, EUR is likely to break 1.1025 today. The next support at 1.0995 could be out of reach for now. Resistance levels are at 1.1055 and 1.1075.”
1-3 WEEKS VIEW: “The following is from our update yesterday (09 Sep, spot at 1.1085): EUR seems to be under mild downward pressure, and there is room for it to retest last week’s low of 1.1025. At this time, the chance of a sustained break below this level is not high. The mild downward pressure is intact provided that 1.1160 is not breached. EUR subsequently fell to a low of 1.1033, closing on a soft note at 1.1034 (-0.44%). The price action has resulted in a further increase in downward pressure. From here, if EUR breaks below 1.1025, it could decline further to 1.0995. On the upside, the ‘strong resistance’ level has moved lower to 1.1105 from 1.1160.”
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