According to FX Strategists at UOB Group, the pair remains neutral although a rebound to the 1.1745/50 band remains on the cards in the next weeks.
24-hour view: “While EUR extended its rebound, it did not have enough momentum to challenge the strong resistance indicated at 1.1675 yesterday (high of 1.1659). Upward pressure has eased and 1.1675 is likely to remain unthreatened for now. From here, we expect EUR to trade sideways to slightly lower, expected to be between 1.1575 and 1.1645”.
Next 1-3 weeks: “We have held the same view since Monday (03 Sep, spot at 1.1595) wherein “EUR could drift lower but any weakness is viewed as part of a 1.1520/1.1675 consolidation range and not the start of a sustained decline”. EUR subsequently touched a low of 1.1527 on Tuesday (04 Sep) and has since rebounded quite strongly. While we continue to hold a neutral stance, the improved underlying tone suggests that there is scope for the rebound in EUR to extend higher within the next several days. However, it is premature to expect the start of a bullish phase even though a move higher towards last month’s 1.1733 top would not be surprising. At this stage, we do not anticipate a clear break above this level. On the downside, only break of 1.1530 would indicate the current mild upward pressure has eased”.