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EUR/USD: Bets on a close below 0.9900 are reduced – UOB

The chances that the EUR/USD closing below 0.9900 seem to have run out of steam in recent sessions, note UOB Group FX strategists Lee Sue Ann and Quek Ser Leang.

24 hour outlook: “Yesterday, we expected the euro to break 0.9900, but we were of the opinion that the next support at 0.9850 was unlikely to be threatened. Although our view was not wrong, as the euro fell to 0.9875, we did not expect the subsequent strong rebound from the minimum. Bounce has room to extend but unlikely to break strong resistance at 1.0005 (there is another resistance at 0.9975). Support is at 0.9925 followed by 0.9890″.

Next 1-3 weeks: “Last Friday (Sep 02, pair at 0.9945), we highlighted that the risk for the euro had shifted to the downside. We added that the euro had to close below major support at 0.9900 before a decline was likely. Yesterday (Sep 5) the Euro fell to a new multi-year low at 0.9875 before rebounding to close at 0.9926 (-0.25%) So far no change in our opinion, though after yesterday’s strong rebound In New York, the odds of the euro closing below 0.9900 have decreased. To the upside, the break of the strong resistance at 1.0005 (no change in level from yesterday) would indicate that the next support at 0.9850 does not come into the picture.”

Source: Fx Street

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