EUR/USD: Still room for a move to 1.0820 – UOB

FX Strategists at UOB Group Quek Ser Leang and Lee Sue Ann noted EUR/USD could still drop to 1.0855 and then 1.0820 amidst the current negative outlook.

Key Quotes

24-hour view: “We highlighted yesterday ‘downward momentum has waned somewhat and this coupled with still oversold conditions suggests EUR is unlikely to weaken much further’. We expected EUR to ‘to trade between 1.0870 and 1.0935’. EUR subsequently dipped to 1.0863 before settling at 1.0878 (-0.14%). Downward momentum has improved, albeit not by much. From here, EUR could dip below 1.0855 but may not be able to maintain a foothold below this level. The next support at 1.0820 is unlikely to come under threat for today. Resistance is at 1.0905 followed by 1.0925.”

Next 1-3 weeks: “Our narrative from two days ago (06 Apr, spot at 1.0905) still stands. As highlighted, the outlook for EUR is still negative and the next levels to focus on are at 1.0855 and 1.0820. Overall, only a breach of 1.0955 (‘strong resistance’ level was at 1.0975 yesterday) would indicate that the current downward pressure has eased.”