EUR/USD could return to the 1.0700 area – UOB

Economist Lee Sue Ann and UOB Group Market Strategist Quek Ser Leang suggest that the EUR/USD risks falling to the 1.0700 area in the coming weeks.

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24 hour view: “Our forecast for the EUR/USD to trade in a range was wrong as it plunged lower and plunged 1.07% (NY close at 1.0793). The strong bearish momentum suggests that the EUR/USD could fall below of 1.0755, although the next support at 1.0700 is unlikely to be threatened today. Resistance is at 1.0825, followed by 1.0855”.

Next 1-3 weeks: “Last Friday (Feb 3, EUR/USD at 1.0905), we indicated that there had been a rapid loss of bullish momentum. However, we were of the opinion that EUR/USD could first consolidate between 1.0820 and 1.1020 before heading higher. During the American session, EUR/USD fell to a low of 1.0790. This price move is likely to be the start of a pullback. This move could extend to 1.0700. Going forward, next major support below 1.0700 is at 1.0615. Overall, only a break of 1.0890 would indicate that downside risk has subsided.”