EUR/USD room for a test of 1.1530 – UOB

FX Strategists at UOB Group remain bearish on the pair, allowing a probable test of the 1.1530 area in the next weeks.

Key Quotes

24-hour view: “EUR traded sideways albeit at a lower range than anticipated. While the undertone has weakened somewhat, any down-move from here is unlikely to have enough impetus to challenge last week’s low near 1.1575 (1.1595 is already quite a strong level). On the upside, resistance is at 1.1655 but the stronger level is closer to 1.1675”.

Next 1-3 weeks: “EUR has been consolidating within relatively narrow ranges after the sharp decline late last week. As highlighted in recent updates, despite the oversized drop, there is scope for extension towards the next support at 1.1530. That said, downward momentum has eased somewhat with the consolidation. However, only a break back above 1.1755 (stop-loss level unchanged) would indicate that a short-term low is in place. Until then, a push lower towards 1.1530 is not ruled out even though the odds for such a move have diminished. Positioning wise, those looking to sell may like to wait for a bounce to 1.1675”.