EUR/USD: Still scope for further losses – UOB

EUR/USD remains under pressure and could slip back to the 1.0100 level in the next few weeks, according to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “Yesterday, we highlighted that EUR ‘could dip to 1.0145 first before stabilization is likely’. We added, ‘EUR is unlikely to challenge the next major support at 1.0100’. Our view was not wrong as EUR dropped to a low of 1.0142 before rebounding slightly. While downward momentum is beginning to ease, the weakness in EUR has not stabilized just yet. In other words, there is room for further EUR weakness even though the major support at 1.0100 is unlikely to come under threat (there is another support at 1.0125). On the upside, a break of 1.0220 (minor resistance is at 1.0195) would indicate that EUR weakness has stabilized.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (07 Jul, spot at 1.0185). As highlighted, further EUR weakness still appears likely even though oversold conditions could slow the pace of any further decline. Overall, only a break of 1.0270 (‘strong resistance’ level was at 1.0310 yesterday) would indicate the downside risk in EUR that started one week ago has run its course. Looking ahead, the next support below 1.0100 is at the rather critical psychological level of 1.0000.”