Lee Sue Ann and Quek Ser Leang, FX Strategists at UOB Group, noted that the probability of EUR/USD to break below 1.0340 seems to have lost momentum.

Key Quotes

24-hour view: “EUR traded between 1.0387 and 1.0442 before settling at 1.0431 (+0.19%). Upward pressure appears to be building and USD is likely to edge higher from here. That said, any advance is unlikely to break the strong resistance at 1.0490 (minor resistance is at 1.0465). On the downside, a breach of 1.0390 (minor support is at 1.0415) would indicate that the upward pressure has eased.”

Next 1-3 weeks: “Last Friday (13 May, spot at 1.0385), we highlighted that a break of the 2017 low near 1.0340 could trigger further sharp decline. EUR subsequently dipped to 1.0348 before rebounding. Downward momentum is beginning to ease but only a breach of 1.0490 (no change in ‘strong resistance’ level) would indicate that EUR is unlikely to break 1.0340. All in, the odds for a break of 1.0340 have diminished unless it can move and stay below 1.0390 within these 1 to 2 days.”