According to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, the downside pressure in EUR/USD is expected to alleviate on a close above 1.0620.

Key Quotes

24-hour view: “Yesterday, we expected EUR to ‘consolidate and trade within a range of 1.0510/1.0610’. EUR subsequently traded within a narrower range than expected (1.0524/1.0585). Despite the relatively quiet price actions, the underlying tone appears to have weakened. For today, EUR could edge lower but any weakness is expected to encounter support at 1.0500. The major support at 1.0470 is unlikely to come under threat. Resistance is at 1.0560 followed by 1.0585.”

Next 1-3 weeks: “We continue to hold the same view as from last Friday (06 May, spot at 1.0540) where EUR has to close below the solid support at 1.0470 before a sustained decline is likely. Shorter-term downward momentum has weakened a tad and the chance for EUR to close below 1.0470 has increased slightly. Overall, only a break of 1.0620 would indicate that the chance for EUR to close below 1.0470 has dissipated.”