UOB’s Quek Ser Leang and Lee Sue Ann describe EUR/USD as firming after a brief dip to 1.1575, with upward momentum starting to build. They expect the Euro to trade between 1.1590 and 1.1685 in coming sessions, seeing 1.1660 as a near-term upside level while the major resistance at 1.1685 is unlikely to be tested immediately as downward momentum has largely faded.

Euro-Dollar holds within defined band

“24-HOUR VIEW: Last Thursday, EUR dropped briefly to 1.1575 and then rebounded. On Friday, when EUR was at 1.1620, we indicated that “the brief decline did not result in any increase in downward momentum,” and expected EUR to “consolidate between 1.1595 and 1.1640.” EUR subsequently traded within a range of 1.1587/1.1622. EUR closed at 1.1602 (-0.14%) but opened higher today. Upward momentum is starting to build, and EUR could rise toward 1.1660 today. The major resistance at 1.1685 is unlikely to come into view. Support is at 1.1625, followed by 1.1610.”

“1-3 WEEKS VIEW: Tracking our negative EUR view from the middle of the month, we highlighted last Wednesday (20 May, spot at 1.1610) that “the focus is now at 1.1570.” After EUR briefly dropped to 1.1575 and rebounded, we highlighted on Friday (22 May, spot at 1.1620) that “downward momentum continued to ease.” We also indicated that “a breach of 1.1655 (‘strong resistance’ level) would suggest that 1.1575 is the extent of the decline in EUR.” EUR traded on a firm footing today, and although our ‘strong resistance’ level has not been breached yet, downward momentum has largely faded. We are neutral on EUR now, and we expect it to trade between 1.1590 and 1.1685.”

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