EUR/USD risks further decline below 1.0340 – UOB

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According to forex strategists from UOB Group, Lee Sue Ann and Quek Ser Leang, the EUR/USD could extend downtrend to 1.0300 and 1.0200 once it breaks above 1.0340.

24 hour outlook: “Although we expected the euro to weaken yesterday, we were of the opinion that the possibility of breaking the main support at 1.0470 was not high. However, the euro broke the main support and fell to a low of 1.0352. The weakness, deeply oversold, has room to drop below 1.0340 before stabilization can be expected (next support is at 1.0300). The resistance is at 1.0430followed by 1.0460″.

Next 1-3 weeks: “Last Friday (06 May, pair at 1.0540), we highlighted that the euro had to close below strong support at 1.0470 before a sustained decline was likely. Yesterday (12 May, pair at 1.0515), we indicated that there was no change in our opinion for now, although the short-term bearish momentum had weakened a bit and the possibility of the euro closing below 1.0470 had slightly increased.That being said, we were expecting the reaction after the break of 10470, as the euro plunged to a low of 10352. From here, a break of the 2017 low near 10340 could trigger another sharp decline. The next support levels are at 1.0300 and 1.0200. Overall, only a break of 1.0490 (“strong resistance” level was yesterday at 1.0605) would indicate that the current weakness of the euro has stabilized.”

Source: Fx Street

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