EUR/USD: Downward bias gathers pace – UOB
|Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group favoured a potential drop of EUR/USD to the 1.0810 zone in the next few weeks.
Key Quotes
24-hour view: Last Friday, we held the view that “there is scope for EUR to dip to 1.0865 before a recovery can be expected.” We highlighted that “the major support at 1.0810 is highly unlikely to come under threat.” EUR dipped more than expected to 1.0827 before rebounding to close little changed at 1.0881 (-0.05%). While downward pressure appears to have eased, EUR could dip to 1.0810 before a more sustained recovery is likely. The chance of EUR breaking clearly below 1.0810 is not high. Resistance is at 1.0900, followed by 1.0915.
Next 1-3 weeks: Our update from last Friday (01 Dec, spot at 1.0895) still stands. As highlighted, after the sharp pullback in EUR last Thursday, upward momentum has faded, and downward momentum has increased a tad. We also highlighted that EUR could edge lower towards 1.0810. EUR then dipped to 1.0827 before rebounding. The bias is still for EUR to dip further to 1.0810. The chance of it breaking clearly below this level is still not high. On the upside, if EUR breaks above 1.0965 (‘strong resistance’ level was at 1.0985 last Friday), it would indicate that it is likely to trade in a range instead of edging lower towards 1.0810.
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