UOB Group currency strategists Lee Sue Ann and Quek Ser Leang noted that the EUR/USD it still risks going further down, with the initial target at the parity level.
24 hour outlook: “The euro fell 0.54% and closed at a 5-week low at 1.0034 last Friday. Although clearly oversold, the weakness of the euro has yet to stabilize. In other words, the Euro could weaken further, though probably at a slower pace, with a sustained decline below 1.0000 unlikely today. Resistance is at 1.0060, but only a break of 1.0085 would indicate that the current euro weakness has stabilized.”
Next 1-3 weeks: “Last Friday, the euro closed at 1.0034 and posted a huge weekly loss of 2.18%. The sharp drop is accompanied by strong bearish momentum and further euro weakness seems likely. A break of 1.0000 would not be surprising, but it remains to be seen if the oversold decline could break the year-to-date low at 0.9950. To the upside, breaking above 1.0115 (‘strong resistance’ level) would indicate that the euro is unlikely to weaken further.”
Source: Fx Street
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