Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group suggest the likelihood of EUR/USD breaking below 1.0750 on a sustainable fashion has lost some momentum.

Key Quotes

24-hour view: “We indicated yesterday that ‘the current price movements are likely part of a consolidation phase’ and we expected EUR to trade sideways between 1.0785 and 1.0845. Our view of sideways trading was correct even though EUR traded in a narrower range than expected (1.0794/1.0831). The price movements offer no fresh clues and we continue to expect EUR to trade sideways between 1.0785 and 1.0845.”

Next 1-3 weeks: “Our update from yesterday (22 May, spot at 1.0820) still stands. As highlighted, the likelihood of EUR breaking clearly below 1.0750 has diminished. However, only a break above 1.0860 (no change in ‘strong resistance’ level) would indicate the EUR weakness that started more than a week ago has stabilized. In order not to lose further momentum, EUR has to break and stay below 1.0785 in the next 1-2 days or a breach of the ‘strong resistance’ at 1.0860 will not be surprising.”