The prospects for EUR/USD remain negative and could still fall to the 0.9850 region before falling to 0.9800 in the coming weeks, according to forex strategists at UOB Group, Lee Sue Ann, and Quek Ser Leang.
24 hour outlook: “Yesterday, we held the view that the euro’s bounce had room to extend, but was unlikely to break 1.0005. While our view was not wrong, as the euro rose as high as 0.9986 during early London hours, we did not expect the Subsequent sharp decline from top (EUR tumbled to fresh low of 0.9864) Rapid decline seems to predate itself but there is room for EUR to test 0.9850. For today, the next support at 0.9800 is unlikely to be threatened. To the upside, the breakout of 0.9955 (minor resistance is at 0.9930) would indicate that the current bearish pressure has eased.”
Next 1-3 weeks: “Last Friday (Sep 02, pair at 0.9945), we highlighted that the risk for the euro had shifted to the downside. We added that the euro had to close below major support at 0.9900 before a decline was likely. After the euro fell to 0.9875 and rebounded sharply, we highlighted yesterday that the odds of the euro closing below 0.9900 had diminished.The euro subsequently rose to 0.9986 and tumbled to 0.9862 before rebounding and closing lower. 0.9902 (-0.24%).Although the euro did not close below 0.9900, short-term momentum has improved.In other words, the risk for the euro remains to the downside. The levels to watch are 0.9850 and 0.9800. Regarding resistance, a break of 0.9980 (‘strong resistance was at 1.0005 yesterday) would indicate downside risk has dissipated.”
Source: Fx Street
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