Shrinking odds for further EUR/USD weakness – UOB

FX Strategists at UOB Group suggest the bearish phase in EUR/USD could be nearly over.

• 24-hour view: EUR dipped to a fresh 1-month low of 1.0987 before recovering to the end the day on a firm note (1.1021, +0.14%). The 1.0987 low is likely a short-term bottom. While momentum is lackluster, there is scope for the current recovery to extend higher to 1.1045. For today, a sustained rise above this level is not likely (next resistance is at 1.1065). Support is at 1.1005 followed by 1.0990.
• Next 1-3 weeks: EUR dropped and touched a fresh low of 1.0987 yesterday before rebounding to close higher by +0.13% (NY close of 1.1021). The price action was not surprising as we have highlighted on Wednesday (13 Nov, spot at 1.1010) that while “EUR is still under pressure, the prospect for a sustained decline below the next support at 1.0970 is not high”. The lackluster downward momentum has deteriorated further and from here, a move above 1.1045 (‘strong resistance’ level was at 1.1065 yesterday) would indicate that the weak phase in EUR that started in the middle of last week has run its course. Looking forward, a breach of 1.1045 would suggest EUR has moved into sideway-trading phase (too early to expect a sustained recovery)."