FX Strategists at UOB Group noted EUR/USD faces a potential drop to the 1.1600 area in the next weeks.
Key Quotes
24-hour view: “Last Friday, we held the view that EUR “could edge lower and test the next major support at 1.1640 first before the risk of a rebound would increase”. However, EUR dipped to 1.1662 before rebounding (high has been 1.1704). The rebound appears to have room to test 1.1720. The strong resistance at 1.1745 is not expected to come under threat. Support is at 1.1680 followed by 1.1665.”
Next 1-3 weeks: “There is not much to add to our update from last Friday (20 Aug, spot at 1.1675). As highlighted, while downward momentum has not improved by much, the risk is still for a lower EUR. A break of 1.1640 would shift the focus to the major and rather critical level at 1.1600. Overall, the downside risk is deemed intact as long as EUR stays below 1.1745 (no change in ‘strong resistance’ level).”
