Provided that 1.1015 is not breached, the weakness in EUR could extend to 1.0935 before stabilisation can be expected. In the longer run, further EUR weakness appears likely; the next two support levels to monitor are 1.0935 and 1.0900, UOB Group FX analysts Quek Ser Leang and Peter Chia note.
Support levels to monitor are 1.0935 and 1.0900
24-HOUR VIEW: “The sharp selloff that sent EUR plunging to 1.0950 was unexpected (we were expecting range trading). Not surprisingly, after such a sharp decline, conditions are severely oversold. However, provided that 1.1015 (minor resistance is at 1.0995) is not breached, the weakness could extend to 1.0935 before stabilisation can be expected. The major support at 1.0900 is unlikely to come into view.”
1-3 WEEKS VIEW: “Last Wednesday (02 Oct), when EUR was trading at 1.1065, we noted the ‘rapid buildup in downward momentum.’ We were of the view that ‘this is likely to lead to EUR weakness, and the levels to monitor are 1.1030 and 1.1000.’ After EUR fell towards 1.1000, we indicated last Friday (04 Oct, spot at 1.1035) that ‘to continue to decline, EUR not only has to break below 1.1000 but also the next solid support at 1.0980.’ In NY trade, EUR easily broke below both support levels, reaching a low of 1.0950. Although conditions are oversold, further EUR weakness appears likely. The next two support levels to monitor are 1.0935 and 1.0900. On the upside, a breach of 1.1060 (‘strong resistance’ level was at 1.1090 last Friday) would mean that EUR is not weakening further.”
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