EUR/USD upside loses momentum – UOB

FX Strategists at UOB Group noted further upside in EUR/USD appears to be losing some traction.

Key Quotes

24-hour view: “Our expectation for EUR “to edge above 1.1180” was incorrect as it slumped after touching 1.1175. While the rapid decline appears to be running ahead of itself, there is no sign of stabilization just yet and the risk is still on the downside. That said, 1.1090 is a solid support and this level is unlikely to be challenged for today (there is a minor support at 1.1110). On the upside, only a move above 1.1155 (minor resistance is at 1.1140) would indicate that the current weakness has stabilized”.

Next 1-3 weeks: “The October’s peak at 1.1179 continues to thwart the advance in EUR as it retreated after failing to break this strong resistance for the third straight day (high of 1.1175 yesterday). The price action was not exactly surprising as we highlighted last Thursday (31 Oct, spot at 1.1155) that EUR has to ‘punch’ through 1.1179 convincingly or the up-move may falter. While our ‘key support’ at 1.1090 is still intact, the price action over the past few days suggests EUR may not be ready to move above 1.1179 just yet. In other words, the odds for further EUR strength have diminished. In order to rejuvenate the current flagging momentum, EUR has to move and stay above 1.1155 within these 1 to 2 days or a break of 1.1090 would indicate that the positive phase in EUR that started about one month ago (see annotations in the chart below) has run its course”.