UOB Group currency strategists Lee Sue Ann and Quek Ser Leang point out that EUR/USD further declines are expected to meet strong support around the 1.0540 level short term.
Key comments
24 hour view: “We were expecting EUR/USD to strengthen yesterday, but were of the opinion that ‘any advance will face strong resistance at 1.0750’. We noted ‘another strong level at 1.0785’. EUR/USD reached a high of 1.0773 during the hours London, before selling off sharply to a low of 1.0609. There is room for EUR/USD to drop below 1.0600, but a clear break of 1.0570 looks unlikely for now. Resistance lies at 1.0650, followed by 1.0690” .
Next 1-3 weeks: “Yesterday (June 9, EUR/USD at 1.0715), we highlighted that shorter-term bullish momentum is starting to build and the risk of a break of 1.0785 has increased. However, EUR/USD did not break 1.0785 , as it reached a high of 1.0773 during London hours before falling.The ‘failure’ to break major resistance at 1.0785 coupled with strong selling has shifted risk to the downside.That being said, expect May any weakness face strong support at 1.0540 To maintain bearish momentum, EUR/USD should not break above 1.0720 (‘strong resistance’ level) these days.
Source: Fx Street
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