Peter Fx and Quek Ser Leang, forex strategists at UOB Group, suggested that the EUR/USD could accelerate losses after a break of 1.0470.
24 hour outlook: “The strong and quick EUR sell-off came as a surprise as it tumbled to 1.0491 before bouncing back. There is room for euro weakness to spread even although a break from last week’s low at 1.0470 seems unlikely. To the upside, a break of 1.0600 (minor resistance is at 1.0570) would indicate current weakness has stabilized.”
Next 1-3 weeks: “Yesterday (05 May, pair at 1.0615), we highlighted that while it was premature to expect a major reversal, short-term EUR strength could extend to 1.0695. The EUR subsequently rose to 1.0641 before making a surprise drop to 1.0491. break of our ‘strong support’ at 1.0520 indicates that the pressure to the upside has dissipated. 1.0470 is strong support and the Euro needs to close below this level before a sustained decline is likely.. At this point, it is unclear if the EUR has enough momentum to close below 1.0470. Looking ahead, if it approaches 1.0470, the next support level to watch is at 1.0420.”
Source: Fx Street
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