EUR/USD: Closest resistance is at 1.0850 - UOB Group

Room for the Euro (EUR) to test the major support at 1.0760 before a recovery can be expected, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

May try to test 1.0760

24-HOUR VIEW: "Our view for EUR to trade sideways yesterday was incorrect. Instead of trading sideways, it fell to 1.0775 before closing at 1.0791 (- 0.31%). Downward momentum has increased, albeit not much. Today, there is room for EUR to test the major support at 1.0760 before a recovery can be expected. A sustained break below this level seems unlikely. The next support at 1.0745 is also unlikely to come under threat. Resistance levels are at 1.0805 and 1.0820."

1-3 WEEKS VIEW: "We turned negative in EUR in the middle of last week (see annotations in the chart below). After EUR struggled to extend its decline, we highlighted yesterday (01 Aug, spot at 1.0820) that “downward momentum is showing tentative signs of slowing, and the chance of EUR dropping further to 1.0760 is diminishing.” However, we pointed out that “only a breach of 1.0870 would mean that 1.0760 is out of reach this time round.” In London trade, EUR lurched lower and fell to 1.0775. The slowing momentum has been rejuvenated somewhat, but it remains to be seen if EUR has enough momentum to break clearly below 1.0760. Note that below 1.0760, there is another rather strong support at 1.0745. On the upside, the ‘strong resistance’ level has moved lower from 1.0870 to 1.0850."