FX Strategists at UOB Group famous additional weak point in EUR/USD shouldn’t be dominated out within the close to time period.
24-hour view: “Whereas we anticipated EUR to weaken final Friday, we had been of the view that ‘a transparent break of the foremost long-term assist at 1.1855 would come as a shock’. Nevertheless, EUR cracked 1.1855, dropped to 1.1845 earlier than rebounding shortly. Regardless of the breach of 1.1855, downward momentum has not improved by all that a lot. There may be room for EUR to dip to 1.1835; the following assist at 1.1800 is probably going out of attain. On the upside, a break of 1.1920 (minor resistance at 1.1900) would point out that the present weak point has stabilized.”
Subsequent 1-3 weeks: “We highlighted final Friday, (18 Jun, spot at 1.1915) that threat stays on the draw back and the ‘focus has shifted to the following long-term assist at 1.1855’. We didn’t fairly anticipate the speedy method and ease by which EUR cracked 1.1855 because it plunged to 1.1845 throughout NY hours. Whereas shorter-term circumstances are deeply oversold, additional EUR weak point shouldn’t be dominated out. That mentioned, EUR is unlikely capable of keep the tempo of its decline and it might take some time earlier than the following assist at 1.1800 comes into the image. All in, the draw back threat stays intact until EUR can break above 1.1970 (‘sturdy resistance’ stage was at 1.2005 final Friday).”