EUR/USD shrinking odds for a breakdown of 1.1200 – UOB

In view of FX Strategists at UOB Group, the potential break below the 1.1200 handle appears to have lost some momemtum in the near term.

Key Quotes

24-hour view: “We held the view yesterday “there is scope for EUR to test 1.1350 first the current advance should ease off”. EUR subsequently touched 1.1347 before easing off. Despite the pull-back, the underlying tone still appears to be positive and another test of 1.1350 would not be surprising. A move above 1.1350 is not ruled out but 1.1385 is a strong level and is unlikely to be threatened. On the downside, only a break of 1.1260 would indicate the current upward pressure has eased (minor support is at 1.1290)”.

Next 1-3 weeks: “EUR tested but failed to break the 1.1350 ‘key resistance’ yesterday (high of 1.1347). The price action has further diminished the odds for EUR to crack 1.1200 (we were of the view a break of the major 1.1200 level could lead to a rapid drop in EUR). As indicated yesterday (14 Nov, spot at 1.1305), a break of 1.1350 would suggest EUR has found a short-term bottom near 1.1215 (low seen earlier this week) and EUR would then likely to trade sideways to slightly higher (within an overall broad range). In order to revive the rapidly waning downward pressure, EUR has to move and stay below 1.1260 within these 1 to 2 days or a break of the ‘key resistance’ would not be surprising”.