24-hour view: We highlighted yesterday that “overbought conditions, combined with slowing momentum, suggest EUR is likely to continue to trade sideways.” Our view was incorrect as EUR plummeted to a low of 1.0877 before ending the day on a weak note at 1.0886 (-0.75%). While the sharp decline appears to be running ahead of itself, there is scope for EUR to dip to 1.0865 before a recovery can be expected. The major support at 1.0810 is highly unlikely to come under threat. Resistance is at 1.0915, followed by 1.0940. 

Next 1-3 weeks: Two days ago, EUR rose to a 3-1/2-month high of 1.1017. Yesterday (30 Nov, spot at 1.0975), we indicated that despite the advance, upward momentum has not increased by much. We added, “While the bias for EUR is on the upside, it remains to be seen if it has enough momentum to break clearly above the major resistance at 1.1065.” In London trade, EUR fell sharply and broke below our ‘strong support’ level of 1.0925. Upward momentum has faded, and downward momentum has increased a tad. From here, EUR could edge lower towards 1.0810. At this time, the chance of EUR breaking clearly below 1.0810 is not high. On the upside, if EUR breaks above 1.0985, it would indicate that it is likely to trade in a range instead of edging lower towards 1.0810.