FX Strategists at UOB Group noted the likeliness of EUR/USD to slip back to the 1.1750 area appears to have lost momentum.
24-hour view: “We highlighted last Friday that ‘there is room for EUR to extend its gains’ but we were of the view that ‘the odds for a break of the strong resistance at 1.1885 are not high’. EUR subsequently traded in a relatively quiet manner between 1.1825 and 1.1870 before settling a tad lower at 1.1837 (-0.08%). Momentum indicators are turning neutral and EUR could continue to trade in a quiet manner, expected to be between 1.1820 and 1.1885.”
Next 1-3 weeks: “Yesterday (17 Sep, spot at 1.1795), we highlighted that EUR ‘is under mild downward pressure and could dip below 1.1750 but any weakness may not be sustained’. EUR subsequently dropped to a low of 1.1735 before staging a surprising sharp and robust rebound (overnight high of 1.1853). While downward momentum has been dented, only a break of 1.1885 (no change in ‘strong resistance’ level) would indicate the current mild downward pressure has eased. In other words, there is still chance, albeit a diminishing one for EUR to stage another attempt to close below 1.1750. Looking forward, a breach of 1.1885 would indicate EUR could consolidate within a broad range for a period of time.”