EUR/USD risks further decline below 0.9900 – UOB

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A break of 0.9900 could accelerate losses in the EUR/USD in the short termforex strategists suggest UOB Group, Lee Sue Ann, and Quek Ser Leang.

24 hour outlook: “Euro’s sharp drop to a low of 0.9909 came as a surprise (we were expecting the euro to move in a range). Despite the quick rebound from the bottom, the risk today remains to the downside. Although a break of 0.9900 is not ruled out, it remains to be seen if the Euro can hold below this major support level.. From here, the possibility of the euro falling to 0.9850 is not high. To the upside, a break of 1.0000 (minor resistance is at 0.9975) would indicate bearish pressure has eased.”

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Next 1-3 weeks: “Yesterday (Sep 1, pair at 1.0040), we held the view that the euro was still consolidating, albeit in a higher range of 0.9940/1.0125. We hadn’t anticipated the sharp sell-off that occurred when the euro plunged to 0.9909 before closing down 1.12% (0.9944 close in New York), its biggest one-day drop in a month and a half.The sharp drop has shifted risk to the downside, but euro needs to close below major support at 0.9900 before further sustained decline is likely. The next support is at 0.9850. Overall, just a break of 1.0035 (the current ‘strong resistance’ level) in these 1-2 days would indicate downside risk has dissipated.”

Source: Fx Street

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