The currency strategists of UOB Group suggested that the EUR/USD remains lateralized and could retest the 1.1680 region in the coming weeks.
24 hour perspective: “We highlighted yesterday that there was room for the EUR to weaken further but that 1.1700 was likely to be out of range for now. However, the euro traded quietly between 1.1718 and 1.1770 before closing virtually unchanged at 1.1746 (+ 0.02%). The underlying tone still appears to be a bit soft and we continue to see the possibility of the EUR going down. Having said that, any weakness is likely to be limited to a test of 1.1705 (The next support is at 1.1680). On the upside, a breakout of 1.1780 would indicate that the current slight downward pressure has eased (minor resistance is at 1.1760) ”.
Next 1-3 weeks: “The EUR closed on a firm note last Friday (October 9), but gave up most of its gains yesterday (October 13), as it fell sharply by -0.58% (1.1744), its biggest drop in about 2 months. The failure to hold a foothold above 1.1820, coupled with yesterday’s sharp decline, indicates that the euro is still trading in a consolidation phase. In other words, the EUR could trade between the two main levels of 1.1680 and 1.1820 for a while longer. That being said, short term bearish momentum has improved and a test of 1.1680 would not be surprising“.
Credits: Forex Street
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