24-hour view: The strong bounce that sent EUR to a high of 1.1041 last Friday came as a surprise (we were expecting it to trade in a range). The rapid advance has scope to test 1.1045 before the risk of a more sustained pullback increases. The major resistance at 1.1100 is not expected to come under threat. On the downside, if EUR breaks below 1.0955 (minor support is at 1.0975), it would mean that the current upward pressure has eased. 

Next 1-3 weeks: After EUR dropped to 1.0910, in our latest narrative from last Thursday (03 Aug, spot at 1.0940), we held the view that EUR could weaken further to 1.0865. On Friday, EUR rebounded strongly and took out our ‘strong resistance’ level of 1.1020. The breach of the ‘strong resistance’ level means that the EUR weakness that started more than a week ago has stabilised. For the time being, we expect EUR to trade in a range, likely between 1.0920 and 1.1100.