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EUR/USD: Bearish momentum gains strength – UOB

According to Quek Ser Leang, Market Strategist and Peter Chia, Senior Currency Strategist at UOB Groupadditional losses could drag the EUR/USD up to 1.0770 in the coming weeks.

24 hour perspective: The Euro fell as low as 1.0827 last Friday before rebounding and closing little changed at 1.0881 (-0.05%). Yesterday (Monday), we indicated that while bearish pressure appeared to have eased, the EUR could fall to 1.0810 before a more sustained recovery was likely. In New York trading, the Euro fell as low as 1.0802 before rebounding. This time, the bearish pressure has eased, and is unlikely to weaken much further. Today, the EUR is more likely to trade within a range, probably between 1.0800 and 1.0870.

Next 1-3 weeks: Last Friday (December 1, pair at 1.0895), we observed that the bullish momentum had faded, and the bearish momentum had increased a bit. We expected the Euro to fall towards 1.0810. In line with our expectations, the Euro marked a low of 1.0802 yesterday (December 4). While the bearish momentum has increased, it is not enough to suggest that the EUR is ready to decline on a sustained basis. It has to break and hold below 1.0770 before a sustained decline is likely. The possibility of the Euro breaking clearly below 1.0770 is not high for now, but will remain intact unless it breaks above the strong resistance at 1.0900 (the level was at 1.0965 yesterday).

Source: Fx Street

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