FX Strategists at UOB Group Quek Ser Leang and Peter Chia noted EUR/USD’s potential move to the 1.0400 region seems to have lost momentum.
24-hour view: “Our view for EUR to ‘trade sideways’ last Friday was incorrect as it dropped to 1.0236 before closing at 1.0258 (-0.57%). The decline lacks momentum and EUR is unlikely to weaken much further. For today, EUR is likely to trade within a range of 1.0235/1.0300.”
Next 1-3 weeks: “After EUR soared to a high of 1.0368, we highlighted last Thursday (11 Aug, spot at 1.0300) that further EUR strength appears likely even though overbought shorter-term conditions suggest a slower pace of advance. We indicated the next resistance is at 1.0400. EUR has not been able to make any headway on the upside and it dropped to 1.0236 on Friday. Conditions remain overbought and this coupled with waning momentum suggests the odds for EUR to advance to 1.0400 have diminished. In order to rejuvenate the flagging momentum, EUR has to move and stay above 1.0330 within these 1 to 2 days or break of 1.0230 (no change in ‘strong support’ level from last Friday) would indicate that 1.0400 is not coming into the picture this time round.”