EUR/UD now faces tough support around at 1.0540 – UOB

FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang noted that further downside in EUR/USD is expected to meet strong support around 1.0540 in the near term.

Key Quotes

24-hour view: “We expected EUR to strengthen yesterday but we were of the view ‘any advance is expected to face strong resistance at 1.0750’. We noted, ‘there is another strong level at 1.0785’. EUR spiked to a high of 1.0773 during London hours before staging a sharp sell-off to a low of 1.0609. There is scope for EUR to drop below 1.0600 but a clear break of 1.0570 appears unlikely for now. Resistance is at 1.0650 followed by 1.0690.”

Next 1-3 weeks: “Yesterday (09 Jun, spot at 1.0715), we highlighted that shorter-term upward momentum is beginning to build and the risk of a break of 1.0785 has increased. However, EUR did not break 1.0785 as it spiked to a high of 1.0773 during London hours before plunging. The ‘failure’ to break the major resistance at 1.0785 coupled with the sharp sell-off has shifted the risk to the downside. That said, any weakness is expected to face solid support at 1.0540. In order to maintain the surge in downward momentum, EUR should not move above 1.0720 (‘strong resistance’ level) within these few days.”