In the view of Economist Lee Sue Ann and Market Strategist Quek Ser Leang at UOB Group, EUR/USD now appears to have moved into a consolidation phase.
Next 1-3 weeks: Yesterday (September 11, spot rate at 1.0705), we noticed that “downward momentum has slowed down”. We maintain the view that while EUR may continue to weaken, the likelihood of it breaking clearly below key support at 1.0635 is low. EUR then recovered to a high of 1.0759. Although our 'strong resistance' level at 1.0765 has not yet been broken, the downside momentum has more or less faded. In other words, EUR's weakness from early last week has stabilized. From here, EUR could trade in a range, probably between 1.0690 and 1.0820.
No impetus
In the run-up to the ECB meeting on Thursday, the market seems to be shying away from trading EUR/USD sustainably below the 1.07 mark.
Today, the EUR/USD is likely to move sideways for lack of impetus. There is hardly anything on the data side and due to the blackout period there will be no comments from the ECB or the US Fed.
However, Wednesday's US inflation release will be a data heavyweight that could bring a little more movement to the EUR/USD. Until then, we should enjoy the calm before the storm.
Next 1-3 weeks: Yesterday (September 11, spot rate at 1.0705), we noticed that “downward momentum has slowed down”. We maintain the view that while EUR may continue to weaken, the likelihood of it breaking clearly below key support at 1.0635 is low. EUR then recovered to a high of 1.0759. Although our 'strong resistance' level at 1.0765 has not yet been broken, the downside momentum has more or less faded. In other words, EUR's weakness from early last week has stabilized. From here, EUR could trade in a range, probably between 1.0690 and 1.0820.
No impetus
In the run-up to the ECB meeting on Thursday, the market seems to be shying away from trading EUR/USD sustainably below the 1.07 mark.
Today, the EUR/USD is likely to move sideways for lack of impetus. There is hardly anything on the data side and due to the blackout period there will be no comments from the ECB or the US Fed.
However, Wednesday's US inflation release will be a data heavyweight that could bring a little more movement to the EUR/USD. Until then, we should enjoy the calm before the storm.
