UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia noted that the likelihood of a move to 1.0750 in EUR/USD appears to be losing momentum.

Key Quotes

24-hour view: “We indicated last Friday that EUR ‘could break below 1.0750 but is unlikely to be able to reach the next major support at 1.0700’. We added, ‘a break of 1.0820 would indicate the weakness in EUR has stabilized’. EUR dipped to a low of 1.0758 in Asian trade and then rebounded to a high of 1.0828 in NY trade. The current price movements are likely part of a consolidation phase. Today, we expect EUR to trade sideways between 1.0785 and 1.0845.”

Next 1-3 weeks: “Last Friday (19 May, spot at 1.0775), we indicated that EUR ‘is still weak and is likely to break below 1.0750’. EUR eked out a fresh two of 1.0758 in Asian trade and then rebounded to end the day at 1.0802 (+0.31%). While we continue to hold the view that EUR could break below 1.0750, after the rebound last Friday, the likelihood of a clear break of 1.0750 has diminished. That said, only a break above 1.0860 (no change in ‘strong resistance’ level from last Friday) would indicate the EUR weakness that started more than a week ago has stabilized.”