Forex Strategists UOB Group, Lee Sue Ann and Quek Ser Leang, pointed out that the current weakness of the EUR/USD could mitigate above the 1.0035 level.
24 hour outlook: “Yesterday we highlighted that the Euro was likely to drop further and indicated that next support was at 0.9980 (minor support was at 0.9900). Subsequently, the Euro tested minor support (0.9899 low), bounced sharply to 1.0018 before pulling back to end the day at 0.9967 (+0..26%) The bearish pressure has eased and this, coupled with oversold conditions, suggests that the Euro has probably entered a consolidation phase.In other words , it is Euro likely to trade sideways todayand is expected to be between 0.9920 and 1.0010“.
Next 1 to 3 weeks: “Yesterday (Aug 23, pair at 0.9935), we highlighted that strong momentum was likely to lead to further euro weakness. We noted 0.9870 and 0.9830 as levels to focus on. Subsequently, the euro fell to 0.9899 before staging a surprisingly strong bounce (1.0018 high) Short-term bearish momentum has subsided but there is still room for EUR to weaken. Only exceeding 1.0035 (no change from yesterday’s ‘strong resistance’ level) would indicate that the weakness of the euro that began last week has run its course. Meanwhile, oversold conditions could lead to a couple of days of consolidation first.”
Source: Fx Street
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