Currency strategist Quek Ser Leang of UOB Group’s Global Economics & Markets Research noted that a test of the main support at 0.9670 seems unlikely at the moment.
24 hour outlook: “On 6 Jul 2022 (when EUR/USD was trading at 1.0265), we highlighted in our chart update of the day that the break of critical support at 1.0350, coupled with strong downward momentum, would likely lead to further EUR/USD weakness We added that the next key level to watch was at 1.0000 and that only a break of the falling trend line resistance and the 55 day exponential moving average would indicate that the EUR/USD downtrend from beginning of the year had stabilized”.
“Our opinion that the EUR/USD would weaken proved to be correct as it dipped as low as 0.9950 in mid-July before bouncing back. The bounce came in slightly above the 55-day exponential moving average, but did not break the descending trend line resistance (high 1.0368 in mid-August). EUR/USD fell sharply from 1.0368 and last week, hit a low of 0.9950. Despite breaking the support level, the EUR/USD has not been able to go much lower (low was 0.9899).”
“That said, the risk to the EUR/USD remains bearish, but bearish momentum begins to slow. The next level of support to watch out for is at the bottom of what appears to be a descending channel formation. At this point in time, the chance of EUR/USD falling to the bottom of the channel (currently at 0.9670) is not high. In the shorter term, 0.9900 is already a strong support level. In terms of resistance, the 55-day exponential moving average, the top of the descending channel and the bottom of the daily Ichimoku cloud are near 1.0220. A breakout of this key (and formidable) resistance level would greatly diminish the odds of further EUR/USD weakness in these two months.”
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
