EUR/USD: Decline could extend to 1.0755 – UOB

In the opinion of Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia, further losses could drag EUR/USD back to the mid-1.0700s in the near term.

Key Quotes

24-hour view: “We expected EUR to break 1.0930 last Friday. Our view was incorrect as EUR dropped sharply from 1.0925 to 1.0835. EUR continues to decline in early Asian trade and downward momentum is building rapidly. EUR could decline further even though the major support at 1.0755 is unlikely to come under threat today. Resistance is at 1.0835, followed by 1.0860.”

Next 1-3 weeks: “Last Friday (31 Mar, spot at 1.0905), we held the view that EUR ‘is likely to strengthen to 1.0970’. EUR rose to 1.0925 and then fell sharply. EUR continues to fall in early Asian trade and took out our ‘strong support’ level of 1.0820. Upward momentum has dissipated. The current price actions are likely part of a corrective pullback. The pullback could extend to 1.0755; the odds of a move to 1.0715 are not high for now. On the upside, the ‘strong resistance’ level at 1.0890 is likely to hold, at least for the next couple of days.”