UOB discusses EUR/USD technical outlook and thinks that the pair's month-long positive phase has ended, and is now likely in a corrective pull-back towards 1.1000.
"While we cautioned yesterday (05 Nov, spot at 1.1125) that the “odds for further EUR strength have diminished”, the sharp drop in EUR that easily cracked the 1.1090 ‘strong support’ level and the subsequent weak daily closing at 1.1074 came as a surprise (the -0.47% decline is the largest 1-day drop in 6 weeks). The positive phase in EUR that started about one month ago (see annotations in the chart below) has ended and the current weakness is viewed as a corrective pull-back (and not a major reversal)," UOB note.
"For the next couple of weeks, EUR is likely to trade with a downside bias towards 1.1000. At this stage, a sustained decline below this level is not expected. Resistance is at 1.1125 but only a 1.1140 (‘strong resistance’ level) would indicate our view for a pull-back is incorrect,' UOB adds.