Bias to fade rally – OCBC

EUR rallied on broad soft USD backdrop, note OCBC FX strategists Frances Cheung and Christopher Wong.

Potentially bullish in the making

“The Euro was last seen at 1.1164 levels. The bullish momentum on the daily chart is intact, but the RSI is overbought. Potential bullish wedge in the making – usually associated with a bearish reversal. We do not rule out the risk of a withdrawal. Support seen at 1.1140, 1.1090. Resistance at 1.12, 1.1280 levels.”

“In recent ECB talks, Holzmann said a September cut was not a foregone conclusion, while chief economist Lane said a return to the 2% inflation target was not yet certain.”