EUR/USD: below 1.0915, likely to extend to 1.0800/20 - BBH

Analysts from Brown Brother Harriman, point out that the EUR/USD broke an important support at 1.1040 (now a resistance) and they hold a bearish bias over the long term of the pair, that if materializes could imply a decline of GBP/USD below 1.00. 

Key Quotes: 

“The euro has fallen nearly 2.4% against the dollar this month after rising 0.7% last month.  It has risen 2.8% against sterling.  The euro has risen by more than 12% against sterling since the UK referendum, and October may be the fifth consecutive month of appreciation. The last such streak was from August 2012 through February 2013 when the euro's appreciated for seven consecutive months.”  

“The euro's uptrend against the US dollar off the January lows (and through the June and July lows) was violated in the middle of last week near $1.1040. That area now serves as resistance.” 

“Today the euro eased to its lowest level since the late-July low near $1.0950. The spike low in the immediate response to the UK referendum results was nearer $1.0915. A break of that could spur a move toward $1.0800-$1.0820.”

“Incidentally, If the euro goes to $1.08 and recovers to GBP0.9000, that puts cable at $1.20.  If my longer-term view of the euro is accurate (return toward record lows), as big as that if may be, it would likely put cable below $1.00.”