EUR/USD could still weaken further – UOB

EUR/USD still risks further losses in the next few weeks, noted FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “Yesterday, we highlighted that ‘downward pressure has eased’ and we expected EUR to ‘consolidate and trade between 0.9920 and 1.0010’. EUR subsequently dipped to 0.9908, rebounded quickly to 0.9999 before closing largely unchanged at 0.9965 (-0.02%). The price actions still appear to be part of a consolidation phase and EUR is likely to trade between 0.9925 and 1.0010 for today.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (24 Aug, spot at 0.9965). As highlighted, while shorter-term downward momentum has waned, there is still room for EUR to weaken. Only a breach of 1.0035 (no change in ‘strong resistance’ level from yesterday) would indicate that the EUR weakness that started last week (see annotations in the chart below) has run its course. Meanwhile, oversold conditions could lead to a couple of days of consolidation first. Looking ahead, support levels are at 0.9870 and 0.9830.”