EUR/USD neutral near term, eyes a test of 1.1105/10 – UOB

In view of FX Strategists at UOB Group, the pair keeps the neutral stance in the near term while targets the 1.1100 region.

Key Quotes

“We indicated yesterday that “the rapid rebound from the low appears to have scope to extend higher but a move beyond 1.1195 is unlikely”. EUR touched a high of 1.1177 before easing off quickly to hit an overnight low of 1.1138. While the immediate bias is tilted to the downside, any weakness is unlikely to have enough momentum to break below the major 1.1105/10 support (minor support at 1.1120). That said, a break below key 1.1105/10 level could lead to a rapid drop towards the next support at 1.1070. Resistance is at 1.1175 ahead of the still rather strong level at 1.1195”.

“EUR traded quietly yesterday and we continue to hold the view that the downside risk is greater. However, as highlighted several times in recent updates, 1.1105/10 is a rather strong support and only a clear break below this level would indicate that a sustained move towards 1.1025 has started. On the upside, a NY closing above 1.1175 would indicate that the downward pressure has eased”.