UOB’s Quek Ser Leang and Lee Sue Ann describe EUR/USD price action as short-term consolidation between 1.1505 and 1.1555 after last week’s sharp drop. Nonetheless, they maintain a bearish 1–3 week view, looking for further weakness toward 1.1445 while 1.1600 caps as strong resistance, and note that a break of 1.1555 on a multi-month horizon could open the way to the 1.1390/1.1410 support zone.
Euro consolidation within broader decline
“24-HOUR VIEW: Last Friday, EUR dropped sharply to a low of 1.1516. When EUR was at 1.1520 in the early Asian hours yesterday, we highlighted that “while the sharp and rapid decline appears excessive, there are no signs of stabilisation yet.” We added, “as long as 1.1575 (minor resistance is at 1.1535) holds, EUR could drop toward 1.1490.” Our view did not materialise, as EUR dipped to 1.1499, recovered to 1.1554 before settling at 1.1534 (+0.13%). We view the current price movements as part of a consolidation phase, likely between 1.1505 and 1.1555.”
“1-3 WEEKS VIEW: Last Thursday (04 Jun, spot at 1.1605), we noted that “downward momentum is increasing,” and we pointed out that “if EUR breaks and holds below 1.1590, it would increase the risk of a decline toward the significant support at 1.1555.” After EUR plunged to a low of 1.1516 on Friday, we highlighted yesterday (08 Jun, spot at 1.1520) that “given the sharp boost in downward momentum, EUR is likely to continue to weaken toward 1.1445.” We will maintain this view as long as EUR holds below 1.1600 (no change in ‘strong resistance’ level).”
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