Sharp drop seems overdone; as an alternative of weakening additional, Euro (EUR) is extra prone to consolidate in a variety of 1.1580/1.1650 in opposition to US Greenback (USD). Within the longer run, value motion continues to recommend draw back danger in EUR; the subsequent stage to watch is 1.1550, UOB Group’s FX analysts Quek Ser Leang and Peter Chia word.
Worth motion continues to recommend draw back danger in EUR
24-HOUR VIEW: “We said on Monday that ‘the chance of EUR is on the draw back.’ Yesterday (Tuesday), we identified that ‘whereas the chance for EUR stays on the draw back, the lacklustre momentum continues to recommend that 1.1625 is probably going out of attain.’ We additionally identified that ‘resistance ranges are at 1.1685 and 1.1705.’ The next value motion didn’t fairly end up as we anticipated. EUR edged to a excessive of 1.1692 after which in a sudden transfer in the course of the NY session, plunged to a low of 1.1590. The sharp drop seems overdone, and EUR is unlikely to weaken a lot additional. As we speak, EUR is extra prone to consolidate in a variety of 1.1580/1.1650.”
1-3 WEEKS VIEW: “We revised our EUR view to detrimental final Tuesday (08 Jul), when it was at 1.1745. At the moment, we indicated that ‘the present pullback may lengthen to 1.1660.’ As we adopted the following value actions, we indicated within the early Asian session yesterday (15 Jul, spot at 1.1665), that ‘the chance of EUR declining to 1.1625 is rising.’ We added, ‘The draw back danger will enhance within the coming days so long as the ‘robust resistance’ at 1.1735 shouldn’t be breached.’ Though our evaluation proved well timed, we didn’t anticipate EUR to plunge to a low of 1.1590 within the NY session. The worth motion continues to recommend draw back danger in EUR, and the subsequent stage to watch is 1.1550. On the upside, the ‘robust resistance’ is now at 1.1705 as an alternative of 1.1735.”
