Market Strategist Quek Ser Leang and Senior Currency Strategist Peter Chia of UOB Group point out that there is scope for he EUR/USD pull back to the 1.0860 zone in the short term.
24 hour perspective: Yesterday we held the view that the EUR could fall as far as 1.0900 before stabilization was likely. In London trading, the Euro fell as low as 1.0910 and then rebounded to close little changed in NY (1.0944, +0.07%). He Euro appears to have entered a consolidation phase, and is likely to trade in a 1.0920/1.0985 range today.
Next 1-3 weeks: Our update from yesterday (03 Aug, pair at 1.0940) still stands. As we have highlighted, after the Euro broke below the strong support at 1.0920 on Wednesday (02 Aug), a boost was in place. This impulse is likely to cause the Euro continue to weaken to 1.0865. To the upside, if the Euro breaks above the ‘strong resistance’ level at 1.1020 (no change in level), it would indicate that the weakness that began in the middle of last week has stabilized.
Source: Fx Street
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