According to Markets Strategist Quik Ser Liang and Senior FX Strategist Peter Chia at UOB Group, EUR/USD should face tougher resistance near 1.0830 to the downside.
Key words
24-hour view: “While we expected the EUR to fall yesterday, we indicated that ‘any weakness is seen as part of the 1.0940/1.1045 range’. However, EUR easily breached 1.0940 and dropped to 1.0907. Downward momentum is improving and EUR may fall further. Given the oversold conditions, a sustained drop below 1.0890 is unlikely. Major support at 1.0830 is not expected to be visible. Resistance at 1.0950; A break above 1.0975 would suggest that the EUR is not falling further.”
Next 1-3 Weeks: “We noted yesterday (April 17, spot at 1.0990) that while the upside momentum is starting to fade, only a breach of 1.0940 would indicate that the EUR is not getting any stronger. In NY trade, the EUR cracked 1.0940 and dropped to a low of 1.0907. Downward momentum appears to be building, albeit tentatively. From here, the EUR is likely to trade with a bearish bias but any decline is expected to encounter solid support at 1.0830. To put it another way, at this stage, a clear break below 1.0830 seems unlikely. As long as the EUR remains below the ‘strong resistance’ level, the downside bias remains intact, currently at 1.1025.”
