EUR/USD sees its upside impulse somewhat diminished for the time being, according to Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group.
24-hour view: EUR fell to a low of 1.0662 on Tuesday. Yesterday (Wednesday), we indicated that “the decline lacks momentum, and EUR is unlikely to weaken further.” We expected EUR to trade sideways between 1.0665 and 1.0725. EUR then dipped briefly to 1.0558, rebounded to 1.0716 before ending the day little changed at 1.0707 (+0.07%). The rebound has gained momentum, albeit not much. Today, EUR could edge higher but is unlikely to break above Monday’s high near 1.0755. Note that there is another resistance at 1.0740. In order to maintain the current tentative buildup in momentum, EUR must stay above 1.0670 (minor support is at 1.0690).
Next 1-3 weeks: Our update from yesterday (08 Nov, spot at 1.0700) is still valid. As highlighted, while upward momentum has waned somewhat, only a breach of 1.0640 (no change in ‘strong support’ level from yesterday) would indicate that 1.0770 is out of reach.