EUR/USD deeper pullbacks not likely – UOB

FX Strategists at UOB Group believe the likeliness of a decline to the 1.1330 region has run out of momentum in the near term.

Key Quotes

“We indicated yesterday that “further downside probe is likely but the strong support at 1.1330 is unlikely to yield so easily”. EUR touched a low of 1.1335 before recovering slightly. While downward momentum has waned, a test of 1.1330 is not ruled but the next support at 1.1300 is unlikely to come into the picture. On the upside, resistance is at 1.1380 but only a move back above 1.1400 would indicate that the current mild downward pressure has eased”.

“EUR dipped to a low of 1.1335 yesterday, a few pips above the stop-loss for our bullish view at 1.1330. While short-term downward pressure has waned somewhat, a move below 1.1330 is not ruled out. From here, unless EUR can move and stay above 1.1400 within the next 1 to 2 days, it appears likely that last week’s 1.1445 peak is the extent of the current bullish phase. In the meanwhile, those who are long from 1.1295 should continue to look to exit half of their position if there is move towards 1.1435”.