Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group suggest EUR/USD could attempt some consolidation ahead of a potential drop below 1.0800.
Key Quotes
24-hour view: We expected EUR to weaken further yesterday. We indicated that “a clear break of the major support at 1.0830 could lead to a drop to 1.0790 before the risk of a rebound increases.” In line with our view, EUR weakened, but it did not reach 1.0790 (low of 1.0800). However, it did rebound to end the day at 1.0859 (+0.14%). Downward pressure has faded, and today, EUR is likely to trade in a range, probably between 1.0830 and 1.0895.
Next 1-3 weeks: Yesterday (23 Aug, spot at 1.0845), we noted that “downward momentum has been ‘boosted’, and a break of 1.0830 is likely.” We highlighted that “the next level to focus on below 1.0830 is a considerable support level near 1.0790.” EUR then broke below 1.0830, fell to a low of 1.0800 before rebounding. Short-term downward momentum has eased somewhat, and EUR could consolidate for 1-2 days before moving towards 1.0790. However, if EUR breaks above 1.0915, it would mean that 1.0790 is out of reach this time around.
Source: https://www.fxstreet.com/news/eur-usd-could-face-some-consolidation-ahead-of-further-losses-uob-202308240559