EUR/USD risks have now shifted to the downside – UOB

FX Strategists at UOB Group noted that risks are now tilted to further downside in the pair in the short term.

Key Quotes

“After trading between 1.1200 and 1.1300 for more than a week, EUR cracked the 1.1200 support to hit an overnight low of 1.1193”.

“While the outlook for the next 1 to 3 weeks is still deemed as neutral, the undertone has weakened considerably and the risk has shifted to the downside”.

“From here, EUR is expected to stay under pressure and this could lead to a move lower to test the major 1.1105/10 support (low in late May which coincides with rising trend-line)”.

“At this stage, the odds for a sustained move below this level is not high but a clear break below this level would indicate that EUR has moved into a bearish phase (with an immediate target of 1.1000)”.

“All in, this pair is expected to stay under pressure in the coming days unless it can reclaim 1.1265/70. On a shorter-term note, 1.1235 is already a strong resistance”.