In view of FX Strategists at UOB Group, a probable drop to the 1.0920 region in EUR/USD has gathered traction as of late.
24-hour view: “Instead of trading sideways, EUR dropped sharply to a low of 1.0983 before recovering. Despite the rebound from the low, the underlying tone is still weak and EUR could retest the 1.0980 support. For now, the next support at 1.0950 is unlikely to come into the picture. Resistance is at 1.1030 but only a move above 1.1050 would indicate the current weakness has stabilized”.
Next 1-3 weeks: “We have held the same view since last Thursday (05 Sep, spot at 1.1035) wherein EUR is “expected to trade sideways”. Our view was not wrong as EUR traded sideways for several days before lurching lower and testing the bottom of the expected 1.0980/1.1110 range yesterday (low of 1.0983). The price action has increased the downside risk for EUR. However, downward momentum has not improved by much and only a NY close below 1.0980 would suggest EUR is ready to retest the early September low of 1.0924. The prospect for such a scenario is not high for now but would continue to increase unless EUR can move and stay above 1.1050 within these few days”.
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