Near-term outlook for EUR/USD still looks weak – UOB

FX Strategists at UOB Group noted EUR/USD still risks further declines in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that ‘despite the breach of 1.1855, downward momentum has not improved by all that much’ and we held the view that ‘there is room for EUR to dip to 1.1835’. Our expectation did not materialize as EUR dipped to 1.1846 before rebounding smartly (high has been 1.1921). Downward pressure has dissipated and the current movement is deemed as part of a consolidation phase and EUR is likely to trade within a 1.1875/1.1935 range for today.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (21 Jun, spot at 1.1875). As highlighted, EUR is still week but oversold conditions suggest it may take a while before the next support at 1.1800 comes into the picture. On a shorter-term note, 1.1845 is already quite a strong support level (note that EUR tried but failed to move clearly below this level the past two days). On the upside, a break of 1.1970 (no change in ‘strong resistance’ level) would indicate that the weak phase in EUR that started early last week has run its course.”