EUR/USD risks further weakness near term – UOB

UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang suggest EUR/USD could face some downside pressure in the next few weeks.

Key Quotes

24-hour view: “Our view for EUR to decline further yesterday was incorrect as it rebounded to a high of 1.0982. Despite the advance, there is no marked improvement in momentum. While EUR could edge higher today, we view any advance as part of a 1.0935/1.1000 range. In other words, we do not expect a sustained drop below 1.0935 or above 1.1000.”

Next 1-3 weeks: “Yesterday (18 Apr, spot at 1.0925), we noted that ‘downward momentum appears to be building, albeit tentatively’. We held the view that EUR ‘is likely to trade with a downward bias but any decline is expected to face solid support at 1.0830’. While we continue to hold the same, short-term price actions suggest EUR is likely to consolidate for 1-2 days first. Overall, only a breach of 1.1025 (no change in ‘strong resistance’ level) would indicate that the build-up in momentum has fizzled out.”