EUR/USD: Rebound risk on the cards – OCBC

The Euro (EUR) fell in reaction to Trump’s threat on tariffs, though there was no mention of Europe. Pair was last at 1.0509 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.        

Upside surprise may aid the squeeze in EUR shorts

“EUR’s pullback lower did not find traction. Price action suggests EUR bear may also be feeling the fatigue. Bearish momentum on daily chart intact but shows signs of fading while RSI shows signs of turning higher.”

“Bullish divergence is also observed on daily MACD. Not ruling out EUR short squeeze in the near term. Resistance at 1.0510, 1.0665 (21 DMA). Key support at 1.0450 levels before 1.03 levels. Focus this week on Euro-area CPI. Upside surprise may aid the squeeze in EUR shorts.”