Forex strategists at UOB Group suggested that the EUR/USD it could fall back below 1.1770 as long as 1.1850 limits the upside.
24-hour perspective: “Yesterday, we considered that the EUR could fall below 1.1795, but the next major support at 1.1770 was unlikely to enter the picture. Subsequent weakness exceeded our expectations as the euro fell to 1.1768 before staging a sharp rebound and fast. The downward pressure has dissipated with the rebound and the euro is unlikely to challenge the 1.1768 low. For today, it is EUR likely to consolidate and trade within a 1.1790 / 1.1830 range.”
Next 1-3 weeks: “Last Thursday (09 Sep, pair at 1.1815), we highlighted that the EUR was still consolidating within a 1.1795 / 1.1895 range. And we added:« While the downside momentum is showing tentative signs of rebounding, only a daily close below 1.1770 would signal the start of a deeper EUR retracement. ”The euro fell a couple of pips below 1.770 (low of 1.1768) yesterday before quickly rebounding to close without much change for the day (1.1808, -0.05%). The downside momentum hasn’t improved much, but As long as the single currency remains below 1.1850, there is scope for it to close below 1.1770 in a few days. Looking ahead, the next support below 1.1770 is at 1.1725. “