According to UOB Group currency strategists Lee Sue Ann and Quek Ser Leang, the EUR/USD it could fall back below the 1.0100 level in the coming weeks.
24 hour outlook: “Our view that the EUR would trade in a range yesterday was incorrect as it fell sharply to 1.0153 before closing on a weak note at 1.0160. Strong bearish momentum suggests that Euro could weaken further but sustained decline below early August low near 1.0120 is unlikely. To the upside, a break of 1.0205 (minor resistance is at 1.0185) would indicate that the current weakness has stabilized.”
Next 1 to 3 weeks: “Yesterday (Aug 15, pair at 1.0260), we noted that ‘overbought conditions remained and this, coupled with fading momentum, suggested that the odds of the euro advancing to 1.0400 had diminished’. However, we did not expect the strong selling that occurred when the euro broke our ‘strong support’ at 1.0230 and tumbled to 1.0153 before closing on a weak note at 1.0160 (-0.96%) The rapidly improving bearish momentum suggests that the euro could weaken further to 1.0120, and to 1.0095. Overall, only a break of 1.0250 (‘strong resistance’ level) would indicate that the current weakness is unlikely to extend below.”
Source: Fx Street
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