In opinion of FX Strategists at UOB Group, the downside pressure in EUR/USD has picked up pace and could recede to 1.1170 in the next weeks.

Key Quotes

24-hour view: “Our view for EUR to ‘trade sideways’ was incorrect as it popped to a high of 1.1288 during London hours. The advance was however, short-lived as EUR dropped quickly to 1.1217 before bouncing back up. The choppy swings have resulted in a mixed outlook. For today, EUR could continue to trade in a choppy manner, likely within a broad 1.1200/1.1280 range.”

Next 1-3 weeks: “We highlighted last Friday (26 Jun, spot at 1.1220) that ‘downward pressure has ticked up but EUR has to close below 1.1170 before a more sustained decline can be expected’. We added, ‘the prospect for such a move is not high but it would continue to increase unless EUR moves and stays above 1.1300 within these 1 to 2 days’. EUR popped to a high of 1.1288 yesterday (29 Jun) before easing off quickly. Downward pressure has eased somewhat but only a break of 1.1300 would indicate that the downside risk has dissipated (and that EUR is still trading in a broad 1.1170/1.1380 range). In other words, there is no change in our view from last Friday.”

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