EUR/USD: Risk for EUR is on the downside – UOB Group

Risk for Euro (EUR) is on the downside against US Dollar (USD), but it does not appear to have enough momentum to reach the major support at 1.1625. In the longer run, if EUR were to close below 1.1660, it could potentially trigger a move to 1.1625, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Below 1.1660, EUR can move to 1.1625

24-HOUR VIEW: “When EUR was at 1.1685 in the early Asian session last Friday, we indicated that ‘the risk of EUR breaking the major support at 1.1660 is increasing, even though the next support at 1.1625 is probably out of reach for now.’ We added, ‘the downside risk will remain intact provided that 1.1720 is not breached.’ Our expectations did not materialise, as after dipping to a low of 1.1663, EUR rebounded to a high of 1.1713 before closing little changed at 1.1689 (-0.09%). EUR edged modestly lower at the open today. Although there has been no significant increase in downward momentum, the risk for today remains on the downside. However, EUR does not appear to have enough momentum to reach the major support at 1.1625. Resistance is at 1.1700, followed by 1.1720.”

1-3 WEEKS VIEW: “Last Tuesday (08 Jul, spot at 1.1745), we highlighted that ‘while there has been no significant increase in downward momentum, the current pullback in EUR could extend to 1.1660.’ After EUR dipped to a low of 1.1661 on Thursday, we highlighted on Friday (11 Jul, spot at 1.1685) that ‘although there is still no significant increase in momentum, only a breach of 1.1755 (‘strong resistance’ level) would indicate that the current downward risk has faded.’ We also highlighted that ‘until then, if EUR were to close below 1.1660, it could potentially trigger a move to 1.1625.’ We stand by our view.”