EUR/USD still risks further decline – UOB

EUR/USD faces a potential drop to the sub-1.1300 region in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectations for USD to ‘trade between 1.1310 and 1.1360’ was incorrect as EUR dropped to 1.1289 before rebounding. Despite the rebound, the underlying tone is soft and we see room for EUR to test the major support at 1.1285. For today, the odds of EUR breaking this major support are not high. Resistance is at 1.1340 followed by 1.1360.”

Next 1-3 weeks: “Last Thursday (20 Jan, spot at 1.1340), we highlighted that there is a slight downward bias in EUR but any weakness is likely limited to a test of 1.1285. Yesterday (24 Jan), EUR dipped to 1.1289 before rebounding. Despite the rebound, the downward bias remains intact as long as EUR does not breach 1.1385 (no change in ‘strong resistance’ level). Looking ahead, if there is a clear break of 1.1285, the next support level to watch is at 1.1240.”