Strategists Quek Ser Leang and Lee Sue Ann of United Overseas Bank (UOB) point to the EUR/USD's increasing downward momentum following a steep decline to 1.1591, although they see little chance of a sustained break below 1.1585 in the immediate future. A daily closure below 1.1585 over the next few weeks would increase the likelihood of a move toward 1.1565; resistance is located around 1.1645.
Focus on key support at 1.1585
"24-HOUR VIEW: We stated yesterday that "there has been no movement in either negative or upward momentum" in response to Wednesday's price action and that we anticipated EUR "to trade in a range between 1.1610 and 1.1650." But throughout the NY session, EUR saw a significant dip, falling to a low of 1.1591 before rising to close at 1.1610 (-0.19%). There is a slight increase in the downward momentum. EUR may test the major support at 1.1585 today if it stays below 1.1630 (minor resistance is at 1.1620). A sustained slide below this level seems improbable given the current momentum.
"1-3 WEEKS VIEW: Since late last week, we have anticipated an upward bias in EUR trading. We emphasized that "the bullish bias remains intact, but EUR should stay within a smaller range of 1.1585/1.1670" on Monday, September 7, at 1.1625. EUR dropped to a low of 1.1591 yesterday. Although downward momentum is beginning to develop, it is not strong enough to suggest a long-term fall. The likelihood of a break below the next significant support level at 1.1565 would rise, though, if EUR closed below 1.1585. A break of the "strong resistance" level of 1.1645 on the upside would suggest that EUR is probably going to stay in a range.
Focus on key support at 1.1585
"24-HOUR VIEW: We stated yesterday that "there has been no movement in either negative or upward momentum" in response to Wednesday's price action and that we anticipated EUR "to trade in a range between 1.1610 and 1.1650." But throughout the NY session, EUR saw a significant dip, falling to a low of 1.1591 before rising to close at 1.1610 (-0.19%). There is a slight increase in the downward momentum. EUR may test the major support at 1.1585 today if it stays below 1.1630 (minor resistance is at 1.1620). A sustained slide below this level seems improbable given the current momentum.
"1-3 WEEKS VIEW: Since late last week, we have anticipated an upward bias in EUR trading. We emphasized that "the bullish bias remains intact, but EUR should stay within a smaller range of 1.1585/1.1670" on Monday, September 7, at 1.1625. EUR dropped to a low of 1.1591 yesterday. Although downward momentum is beginning to develop, it is not strong enough to suggest a long-term fall. The likelihood of a break below the next significant support level at 1.1565 would rise, though, if EUR closed below 1.1585. A break of the "strong resistance" level of 1.1645 on the upside would suggest that EUR is probably going to stay in a range.
