Quek Ser Leang of Global Economics & Markets Research at UOB Group notes that it is expected that occasional bearish attempts on EUR / USD find solid support at 1.1985.
Key Comments:
“In the technical currency section of our global quarterly outlook released on March 19, 2021 (when EUR / USD was trading at 1.1970), we highlight that ‘the bias for EUR / USD is to the downside, but any weakness finds solid support at 1.1740 (55-week exponential moving average). ‘We add that EUR / USD’ could fall below this solid support, but the prospect of a move towards the November 2020 low at 1.1602 is not. high’.
“The EUR / USD subsequently declined to 1.1702 in early April before recovering. While the rebound broke above the February high of 1.2242, failed to clearly move above the next resistance at 1.2265 (EUR / USD touched 1.2266 last week). The weekly MACD just turned positive, but the inability to break above 1.2265 coupled with the pullback that broke the rising trend line support on the daily chart last Friday (May 28) indicates that the odds of EUR / USD moving above the yearly high near 1.2350 in this couple of months are not high“.
“The short-term bias is tilting lower (the daily MACD is weakening) but any decline is unlikely to threaten the main support zone near 1.1850 (rising trend line and 55-week exponential moving average). On a short term note, May’s low near 1.1985 is already a strong support level. To look at it another way, the EUR / USD could go down in these 1-2 months before attempting to move towards 1.2350 at a later stage. “
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