UOB Group Markets Strategist Quek Ser Leang and Senior Currency Strategist Peter Chia see EUR/USD retreating to the 1.0515 area in the short term.
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24 hour view: After EUR/USD fell sharply to a low of 1.0572 on Monday, we highlighted yesterday that “there is room for EUR/USD to weaken further to 1.0555 before stabilization is likely.” EUR/USD fell short of 1.0555 as it fell to a low of 1.0560 before ending the day at 1.0570 (0.19%). Although there are still no signs of stabilization, there is no significant increase in bearish momentum either. Today, EUR/USD could continue down to 1.0545 before stabilizing. Main support at 1.0515 is unlikely to be on the horizon. To the upside, if EUR/USD breaks above 1.0605 (minor resistance is at 1.0590), it would mean that EUR/USD will not weaken further.
Next 1-3 weeks: Our update from yesterday (September 26, EUR/USD at 1.0590) still stands. As highlighted, the recent price action suggests that EUR/USD is likely to weaken to 1.0515 in the coming days. EUR/USD remains at downside risk if it remains below 1.0650 (the “strong resistance” level was at 1.0665 yesterday).
Source: Fx Street
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