There is still room for further weakness – UOB

Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group still expect EUR/USD to weaken further in the next few weeks.

Key Quotes

24-hour view: After EUR plummeted to a low of 1.0629 last Thursday, we highlighted on Friday that it could decline further. Our view turned out to be incorrect, as EUR rebounded to a high of 1.0687 before settling at 1.0655 (+0.13%). EUR has likely moved into a consolidation phase. Today, EUR is likely to trade in a range, probably between 1.0645 and 1.0695. 

Next 1-3 weeks: There is not much to add to our update from last Friday (15 Sep, spot at 1.0640). As highlighted, there had been a sharp increase in momentum after EUR plummeted last Thursday. The price actions suggest EUR has resumed its recent weakness. However, it remains to be seen if there is enough momentum to carry EUR lower to March’s low near 1.0515. In order to keep the momentum going, EUR must stay below 1.0730, the current ‘strong resistance’ level.