Lee Sue Ann and Quek Ser Leang, forex strategists at UOB Group, noted that the probability that the EUR/USD break below 1.0340 seems to have run out of steam.
24 hour outlook: “The euro traded between 1.0387 and 1.0442 before settling at 1.0431 (+0.19%). upside pressure seems to be building and the dollar may rise from here. That said, any advance is unlikely to break the strong resistance at 1.0490 (minor resistance is at 1.0465). To the downside, a break of 1.0390 (minor support is at 1.0415) would indicate that the upside pressure has subsided.”
Next 1-3 weeks: “Last Friday (May 13, pair at 1.0385), we highlighted that a break of the 2017 low near 1.0340 could trigger a further sharp decline. Subsequently, the euro fell to 1.0348 before rallying. The bearish momentum is beginning to give in, but just a break of 1.0490 (no change in ‘strong resistance’ level) would indicate that the euro is unlikely to break 1.0340. Ultimately, the odds of breaking 1.0340 have diminished unless it can move and hold below 1.0390 in these 1-2 days.”
Source: Fx Street
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