EUR/USD points to a breakdown of 1.0000 – UOB

FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang suggest EUR/USD could slip back below the parity level in the near term.

Key Quotes

24-hour view: “EUR plummeted to 1.0032 yesterday before closing on a weak note at 1.0039 (-1.41%). Strong downward momentum suggests EUR could break the critical support at 1.0000. That said, in view of the deeply oversold conditions, EUR may not be able to maintain a foothold below this level (next support is at 0.9960). Resistance is at 1.0095 followed by 1.0130.”

Next 1-3 weeks: “We have held a negative EUR view since late last month. In our latest narrative from last Friday (08 Jul, spot at 1.0185), we highlighted that further EUR weakness still appears likely even though oversold conditions could slow the pace of any further decline. We indicated, ‘the next support below 1.0100 is at 1.0000’. EUR subsequently dropped below 1.0100, rebounded and yesterday (11 Jul), it plunged to a low of 1.0032. Solid downward momentum suggests a break of 1.0000 would not be surprising. The next levels to focus on are at 0.9960 and 0.9920. On the upside, a break of 1.0180 (‘strong resistance’ level previously at 1.0270) would indicate that the weakness in EUR has stabilized.”