EUR/USD: Still scope for extra decline – UOB

FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang noted EUR/USD could still attempt a move to 1.0725 ahead of 1.0700 in the next weeks.

Key Quotes

24-hour view: “Yesterday, we highlighted that EUR ‘could weaken further to 1.0755 but a sustained decline below this level is unlikely’. EUR subsequently dipped to 1.0759 before rebounding to close little changed at 1.0786 (+0.06%). Downward pressure has eased and the current movement is likely part of a consolidation phase. In other words, EUR is likely to trade sideways for today, expected to be within a range of 1.0770/1.0820.”

Next 1-3 weeks: “Our update from Monday (18 Apr, spot at 1.0805) still stands. As highlighted, the risk for EUR is on the downside even though it may trade above the solid support at 1.0755 for a couple of days first (note that EUR dipped to 1.0759 yesterday before rebounding). Looking ahead, a breach of 1.0755 would shift the focus to 1.0725 followed by 1.0700. Overall, only a break of 1.0845 (no change in ‘strong resistance’ level from yesterday) would indicate that the downside risk has dissipated.”