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EUR/USD: We can see a sustained pullback below 0.9870 – UOB

Forex Strategists UOB Group, Quek Ser Leang, and Peter Chia, suggest that the EUR/USD You risk further losses if the 0.9870 level is breached.

24 hour outlook: “Last Friday we highlighted that the outlook for the euro was mixed and we expected the euro to trade within a range of 0.9925/1.0020. However, the euro rallied to a high of 1.0089 before plunging to 0.9945. The euro extended its fall during the first hours of Asia and, although the euro could fall below 0.9900, the next support at 0.9870 is unlikely to come into the picture. To the upside, the breakout of 0.9980 (minor resistance is at 0.9955) would indicate that the current bearish pressure has eased.”

Next 1-3 weeks: “Euro rallied above our ‘strong resistance’ level of 1.0035 last Friday (high 1.0089) before tumbling to end the day at 0.9961 (-0.13%). Break of ‘strong resistance’ level indicates that the euro weakness that started about two weeks ago is over.Although short-term bearish momentum still suggests downside risk, the euro needs to break below 0.9870 before a sustained decline is likely. The next support is found at 0.9825. The odds of the euro clearly breaking 0.9870 are not high for now, but they would remain intact as long as it doesn’t move above 1.0015 these days.”

Source: Fx Street

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