EUR/USD: Increasing bets for further decline – UOB

UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia suggest EUR/USD risks further decline in the near term.

Key Quotes

24-hour view: “Yesterday, we held the view that EUR ‘could weaken further but a clear break of 1.0500 is unlikely’. However, aside from a brief drop to 1.0548 in London trade, EUR traded mostly sideways. The price movements appear to be consolidative and further sideways trading is likely. Expected range for today; 1.0570/1.0645.”

Next 1-3 weeks: “After EUR plunged to a low of 1.0514, we highlighted yesterday (16 Mar, spot at 1.0575) that ‘while the rapid drop appears to be ‘too fast, too soon’, the risk of EUR dropping further has increased’. We added, ‘it remains to be seen if EUR can break the major support at 1.0470’. There is no change in our view for now. Overall, only a breach of the ‘strong resistance’ at 1.0680 (no change in level) would indicate that the downside risk has faded.”