EUR/USD faces the next support at 1.1630 – UOB

FX Strategists at UOB Group noted that EUR/USD risks a move to 1.1630 ahead of 1.1600 in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that EUR ‘could weaken further but oversold conditions suggest a sustained decline below 1.1660 is unlikely’. We noted that the next support is at 1.1630. The subsequent weakness exceeded our expectation as EUR dropped to a low of 1.1649 before closing on a soft note at 1.1659 (-0.40%). Downward momentum is showing some signs of slowing but there appears to be room for EUR to dip below the major support at 1.1630. For today, the next support at 1.1600 is unlikely to come into the picture. On the upside, a break of 1.1710 would indicate that the current weakness has stabilized (minor resistance is at 1.1685).”

Next 1-3 weeks: “We noted yesterday (22 Sep, spot at 1.1765) that the ‘rapid improvement in downward momentum suggests EUR could weaken further towards the next major support at 1.1695’. While our view was correct, we did expect 1.1695 to come into the picture so soon (EUR dropped to an overnight low of 1.1690). Downward momentum has improved further and the risk is still on the downside. From here, the next support is at 1.1630 followed by 1.1600. On the upside, the ‘strong resistance’ level has moved lower to 1.1815 from yesterday’s level of 1.1855. On a shorter-term note, 1.1760 is already quite a strong level.”