- Summary:
- Analysts at UOB believe that the EURUSD will likely decline and retest the 1.1600 level today. If it does, the declines will be relatively limited
The EURUSD pair is little changed today as traders refocus on the upcoming debate between Donald Trump and Joe Biden. The market is also focused on the upcoming inflation data from Europe, final PMI readings, and the nonfarm payroll numbers from the US. The pair is trading at 1.1637, which is a few pips above the intraday low of 1.1617. Still, analysts at Danske Bank and UOB are cautiously pessimistic about the pair.
In a report released last week, analysts at Danske Bank said that the EURUSD pair will be weighed by negative uncertainty, which they expect will remain through the coming year. They cited the recent data showing that the Eurozone’s services PMIs have been relatively weak in recent months. They also cited the relatively hawkish Fed and a resurgence of the coronavirus illness in parts of the region. Also, they argued that the upcoming election will likely be a catalyst for a stronger US dollar. As such, they remain convinced that the EURUSD will remain between 1.15 and 1.19.
On the other hand, analysts at UOB said that there is still room for the EURUSD to probe the 1.1600 was likely in the next 24 hours. But they warned that further drops below this level will be relatively unlikely. As such, they have placed their support at the 1.1565 level and their resistance at 1.1660 and 1.1685. However, they are still bearish about the pair in the next 1 to 3 weeks.
EURUSD technical outlook
The daily chart shows that the EURUSD has been in a strong downward trend after it reached a YTD high of 1.2015. The pair reached a low of 1.1612 last week, which was the lowest it has been since July 24. It was also slightly below the 23.6% Fibonacci retracement level. In addition, the pair is along the lower line of the Donchian channels.
Therefore, even with the current gain, I suspect that the pair will continue falling today as bears aim for moves below 1.1600. On the flip side, a move above the 1.1750 resistance will invalidate this move.
EUR/USD technical chart
