EUR/USD: Above 1.0840 bulls can take the lead - UOB Group

The Euro (EUR) is likely to trade in a 1.0790/1.0840 range. In the longer run, should EUR break above 1.0840, it would signal the end of the decline that started early this month, UOB Group's FX analysts Quek Ser Leang and Lee Sue Ann note.

EUR is likely to trade in a 1.0790/1.0840 range

24-HOUR VIEW: "Two days ago, EUR broke below the support at 1.0770 and reached a low of 1.0760. Yesterday, when EUR was at 1.0780, we pointed out 'Oversold conditions combined with tentative signs of slowing momentum suggest EUR is unlikely to weaken much further.' We expected EUR to 'trade in a range between 1.0760 and 1.0810.' However, instead of trading in a range, EUR rebounded strongly to 1.0829, closing at 1.0827 (+0.43%). The rebound appears to be running ahead of itself, and instead of continuing to rise, EUR is more likely to trade in a 1.0790/1.0840 range."

1-3 WEEKS VIEW: "We highlighted yesterday (24 Oct, spot at 1.0780) that for EUR to continue to decline, it 'must break clearly below the significant support at 1.0740.' We also highlighted that 'The likelihood of EUR breaking below 1.0740 will remain intact, provided that 1.0840 ('strong resistance' level) is not breached.' EUR subsequently rebounded to a high of 1.0829. Downward momentum is beginning to slow. Should EUR break above 1.0840, it would signal the end of the decline that started early this month."