Likelihood for Euro (EUR) to retest the 1.1290 stage towards the US Greenback (USD) earlier than a extra sustained pullback is probably going; a transparent break above this stage is unlikely. Within the longer run, improve in momentum isn’t enough to counsel a sustained advance; EUR should first break decisively above 1.1290, UOB Group’s FX analysts Quek Ser Leang and Peter Chia observe.
Improve in momentum isn’t enough to counsel a sustained advance
24-HOUR VIEW: “We anticipated EUR to ‘commerce with an upward bias’ yesterday. We identified that ‘as momentum isn’t robust at the moment, any advance is probably going restricted to a take a look at of 1.1225.’ Nevertheless, EUR surged previous 1.1225 to succeed in 1.1288 earlier than retreating to shut at 1.1242 (+0.71%). The decline from the excessive has resulted in a slowdown in upward momentum, however there’s a probability for a retest of the 1.1290 stage earlier than a extra sustained pullback is probably going. A transparent break above 1.1290 seems unlikely. On the draw back, ought to EUR break beneath 1.1195 (minor help is at 1.1215), it will counsel that it’s extra more likely to commerce in a spread as a substitute of retesting 1.1290.”
1-3 WEEKS VIEW: “Our newest narrative was from final Thursday (15 Could, spot at 1.1180), whereby EUR ‘has doubtless entered a consolidation part, and it’s more likely to commerce between 1.1100 and 1.1290 in the intervening time.’ After vary buying and selling for a number of days, EUR rose and reached 1.1288 yesterday. The rise in momentum isn’t enough to counsel a sustained advance. EUR should first break decisively above 1.1290 earlier than a transfer to 1.1330 could be anticipated. At present, the possibility of EUR breaking clearly above 1.1290 isn’t excessive, nevertheless it might develop within the subsequent few days so long as 1.1165 isn’t breached.”
