In the opinion of forex strategists at UOB Group, the EUR/USD it risks a deeper pullback if it breaks below the 1.1500 mark.
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24-hour perspective: “We highlighted yesterday that while the EUR could fall below last week’s low of 1.1527, the main support at 1.1500 was not expected to enter the picture. In our view, we were not wrong as the euro fell to 1.1523 before settling at 1.1527 (-0.21%). The downside momentum has barely improved and 1.1500 is not yet expected to enter the scene. At the moment, it is more EUR likely to trade between 1.1520 and 1.1570.”
Next 1-3 weeks: “We expected a weaker EUR for about 2 weeks. After it fell to 1.1527 and rallied, we highlighted on Monday (Oct 11, pair at 1.1570) that the downside momentum was starting to wane and the odds that the EUR traded to 1.1500 had declined. While the EUR was down to 1.1523 yesterday, the downside momentum hasn’t improved much. That said, there is margin for level 1.1500 to be tested, but the euro has to close below this solid support before a further sustained decline can be expected (next support is at 1.1450). On the upside, a breakout of 1.1585 (previously strong resistance level at 1.1605) would indicate that the weak phase in the euro has run its course. “
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