Ella 
24-hour view: Yesterday we pointed out that “the underlying tone is slightly weaker, and the euro will trade in the lower range of 1.0970/1.1030.” However, the euro fell to 1.0950 and then rebounded to close at 1.0982 (-0.10%). The euro rose in early Asian trading, but the momentum did not increase significantly. The current move appears to be part of a consolidation. Today we expect the euro to trade between 1.0970-1.1030.
Next 1-3 weeks: We have been bearish on EUR since the middle of last week. Since Monday (July 31, market price 1.1025), we believe that “downward momentum has weakened, but only a break of 1.1070 will indicate that the euro will not fall further.” The euro rebounded after falling to 1.0950 yesterday. The euro rose sharply in Asia today. The downside momentum has further deteriorated, and the chances of the euro falling to the important support level of 1.0920 this time are very low. However, only a break above 1.1070 would indicate that the current downward pressure has eased.
