EUR/USD a drop below 1.1350 is not expected – UOB
According to FX Strategists at UOB Group, the pair stays neutral although a pullback further south of 1.1350 appears unlikely for the time being.
“In line with expectation, EUR tested the 1.1380 support but stayed above 1.1350 (low has been 1.1369). Despite the rather rapid bounce from the low, the undertone is still weak and this pair is expected to drift lower to 1.1350. At this stage, a sustained move below this level is not expected (next support at 1.1320). Resistance is at 1.1425 followed by yesterday’s high near 1.1455. The high is likely strong enough to cap any intraday recovery”.
“While EUR broke above the strong weekly trend-line resistance at 1.1445 on Tuesday, the failure to hold on to its gains coupled with the sharp drop indicates that the shift to a bullish stance yesterday was wrong. We are neutral now and the recent price action looks like the early stages of a ‘rising wedge’ formation but the key support is much further down at 1.1320. In the meanwhile, EUR is expected to continue to trade choppily, likely within a broad 1.1320/1.1520 range”.
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