EUR/USD: Unlikely to threaten the major support at 1.1490 today – UOB Group

Further Euro (EUR) weakness is not ruled out; any decline is unlikely to threaten the major support at 1.1490 today. In the longer run, the next level to watch is at 1.1490, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Next level to watch is at 1.1490

24-HOUR VIEW: "Last Friday, we indicated that 'strong downward momentum suggests EUR could break below the major support at 1.1540 today.' However, we indicated that 'oversold conditions suggest the next major support at 1.1490 is likely out of reach for now.' Our assessments turned out to be correct, as EUR broke below 1.1540 and fell to a low of 1.1520. While further EUR weakness is not ruled out, positive divergence is forming on momentum indicators and any decline is unlikely to threaten 1.1490 today. Note that there is another support level at 1.1510. On the upside, if EUR breaks above 1.1575 (minor resistance is at 1.1555), it would mean that the weakness is stabilising."

1-3 WEEKS VIEW: "Last Thursday (30 Oct, spot at 1.1605), we highlighted that EUR 'is under mild downward pressure, and it may edge lower,' but we held the view that it 'is unlikely to threaten the support at 1.1540.' After EUR subsequently dropped sharply to 1.1546, we indicated on Friday (31 Oct, spot at 1.1565) that 'the price action indicates that EUR is likely to break below 1.1540.' We added, 'the next level to watch is at 1.1490.' EUR subsequently fell below 1.1540 and closed at a three-month low of 1.1534 (-0.27%). As stated last Friday, the next level to watch is 1.1490. Overall, only a breach of 1.1605 (‘strong resistance’ level was at 1.1635 last Friday) would invalidate our current view."