UOB Group currency strategists Lee Sue Ann and Quek Ser Leang suggest that EUR/USD is expected to drop further and find strong support around 1.0580 short term.
Key comments
24 hour view: “We were expecting EUR/USD to ‘consolidate and move between 1.0685 and 1.0765’ yesterday. We weren’t expecting the sharp drop to as low as 1.0625 during the New York session. While the rapid decline seems to come early, there is room for EUR /USD drops below 1.0625 Next major support at 1.0570 not expected to be threatened (further support at 1.0600) To the upside, breaking above 1.0700 (minor resistance is at 1.0680) would indicate current weakness has stabilized .”
Next 1-3 weeks: “Yesterday (June 1, EUR/USD at 1.0735) we highlighted that the recent phase of Euro strength is over and we expected EUR/USD to consolidate and move within a range of 1.0625/1.0790. We did not expect the how quickly EUR/USD approached the expected range bottom at 1.0625 (American session low 1.0625) The rapid build-up of bearish momentum has shifted risk in EUR/USD to the downside. expect any weakness to find solid support at 1.0580 Downside risk remains intact as long as EUR/USD does not move above 1.0730 (‘strong resistance’ level).
Source: Fx Street
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