The Euro (EUR) could continue to weaken; Any decline is likely limited to a test of 1.1030. In the long term, a rapid build-up of downward momentum is likely to lead to EUR weakness; The levels to monitor are 1.1030 and 1.1000, say UOB Group FX analysts Quek Ser Leang and Lee Sue Ann.
The levels to monitor are 1.1030 and 1.1000
24-HOUR VIEW: “We detected ‘a slight increase in downside momentum’ yesterday. We expected the EUR to slide lower, but maintained the view that ‘any decline is likely to be limited to a test of 1.1105.’ In a surprising move, the EUR fell sharply, easily breaking below 1.1105. It also broke the main support at 1.1060, reaching a low of 1.1044. Although oversold, the decline has not stabilized. Today, the EUR could continue to weaken, but This time, any decline is likely limited to a test of 1.1030. Major support at 1.1000 is unlikely to be threatened. Resistance levels are 1.1085 and 1.1110.
1-3 WEEK VIEW: “Our most recent narrative was from last Thursday (September 26, pair at 1.1130), where the EUR ‘has probably entered a range trading phase, probably between 1.1060 and 1.1215.’ The EUR rose above 1.1200 last Friday and again on Monday, but both times retreated quickly. Yesterday, we noted that ‘although the price action supports our view that the EUR is trading in a range, after pulling back from the. upper limit of the expected range of 1.1060/1.1215, it could now test the lower end instead.’ However, instead of testing 1.1060, the EUR broke below this level and hit a low of 1.1044. The EUR closed at a 3-week low of 1.1067, down 0.60%. is rising rapidly, and this could lead to further weakness in the EUR. The levels to monitor are 1.1030 and 1.1000. To maintain momentum building, the EUR should not rise above 1.1150, the current ‘strong resistance’ level. “
Source: Fx Street
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