EUR/USD: Unlikely to weaken much further against – UOB Group

Euro (EUR) is unlikely to weaken much further against US Dollar (USD); it is more likely to consolidate in a range of 1.1520/1.1600. In the longer run, the level to watch now is 1.1500, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

The level to watch now is 1.150

24-HOUR VIEW: "EUR plunged and closed lower by 1.29% on Monday. Yesterday (Tuesday), we pointed out that “while the outsized drop appears excessive, there is a chance for EUR to test the 1.1540/1.1555 support zone before stabilisation can be expected.” EUR weakened more than expected, reaching a low of 1.1515 before rebounding to close at 1.1545 (-0.37%). The decline appears to be overstretched, and there are tentative signs of stabilisation. To put it another way, EUR is unlikely to weaken much further. Today, it is more likely to consolidate in a range of 1.1520/1.1600."

1-3 WEEKS VIEW: "Yesterday, 29 Jul, when EUR was at 1.1595, we indicated that 'the strong surge in downward momentum suggests EUR is likely to break the 1.1540/1.1555 support zone.' We added, 'the next level to watch is 1.1500.' EUR subsequently dropped to a low of 1.1515 and closed at 1.1545. As indicated, the level to watch now is 1.1500. Overall, only a breach of 1.1655 (‘strong resistance’ level was at 1.1700 yesterday) would suggest that EUR is not weakening further."