The Euro (EUR) is expected to trade sideways between 1.0885 and 1.0935. Should EUR break below 1.0885, it would mean that the EUR strength from two weeks ago has come to an end, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.
Below 1.0885 the EUR to become weak
24-HOUR VIEW: “Our expectation for EUR to test the significant resistance zone of 1.0970/1.0980 did not turn out, as EUR pulled back sharply, closing at 1.0896 (-0.37%). The pullback seems to be a bit overdone, and EUR is unlikely to weaken much further. Today, we expect EUR to trade sideways between 1.0885 and 1.0935.”
1-3 WEEKS VIEW: “Two days ago, EUR soared to a high of 1.0947. Yesterday (18 Jul, spot at 1.0940), we indicated that ‘the rejuvenated upward momentum suggests further EUR strength, even though the 1.0970/1.0980 zone is expected to pose significant resistance.’ We did not anticipate the subsequent sharp pullback that resulted in a rapid loss of momentum. Should EUR break below 1.0885 (no change in ‘strong support’ level), it would mean that the EUR strength that started two weeks ago has come to end.”