EUR/USD risks a test of 1.1070 – UOB

FX Strategists at UOB Group remain bearish on EUR/USD and see a potential move lower to the 1.1070 region in the near term.

Key Quotes

24-hour view: “It was hardly any surprise that EUR slipped further and tested its key support at 1.1100. As cited in yesterday update, the next key level of 1.1070 did not “come into the picture” on Thu with USD printing a low of 1.1089. The bias remains on the downside for today and further declines to 1.1070 are on the cards. On the topside, resistance is at 1.1145 and only a move above 1.1180 would indicate that downside pressures have eased”.

Next 1-3 weeks: “Our last narrative (6-Aug, spot at 1.1235) was that “we are still not convinced (EUR) would transit into a ‘positive phase’ as yet” and it should “consolidate gains in 1.1200-1.1300 range.” After 6 days of sideways move, EUR has broken below one of its key supports at 1.1160 overnight and touched a low of 1.1129. The undertone has turned negative and downside pressures have increased. On the downside, expect supports at 1.1100 and 1.1070. A daily close below 1.1100 would probably fuel expectations for the key low of 1.1025 to come next into focus. On the topside, expect resistance at 1.1210 and only a convincing break above the cluster of highs near 1.1250 would indicate that downside pressures have eased”.