EUR/USD risks extra losses once 1.0920 is cleared – UOB

In the view of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, further decline is likely in EUR/USD below the 1.0920 level.

Key Quotes

24-hour view: “While we expected EUR to weaken yesterday, we held the view that ‘it is unlikely to break 1.0970’. However, EUR weakened more than expected as it dropped to a low of 1.0939. While downward momentum has not increased much, there is scope for EUR to drop further to 1.0920 before stabilization is likely. Resistance is at 1.0980, followed by 1.1000.”

Next 1-3 weeks: “Yesterday, EUR dropped to a low of 1.0939. While our ‘strong support’ level of 1.0940 was only slightly breached, the price actions have invalidated our view for EUR to ‘trade with an upward bias’. Short-term downward momentum appears to be building but EUR has to break and stay below 1.0920 before a sustained decline is likely. The chance for EUR to break clearly below 1.0920 is not high for now but it will remain intact as long as EUR stays below 1.1035 in the next few days. Looking ahead, the next support below 1.0920 is at 1.0885.”