FX Strategists at UOB Group note EUR/USD remains under pressure and could extend the drop below the 1.10 handle in the near term.
- "24-hour view: We highlighted yesterday “lackluster momentum suggests any weakness below the strong 1.1000 level is unlikely to be sustained”. The 1.1000 level was unchallenged as EUR traded in a quiet manner and within a relatively narrow range of 28 pips (between 1.1015 and 1.1043). The price action is viewed as part of a consolidation phase and EUR could continue to trade sideways. Expected range for today, 1.1020 and 1.1065.
- Next 1-3 weeks: EUR closed lower for the fifth straight day last Friday as it dropped to 1.1015 before closing at 1.1016. The price action is in line with our view from last Wednesday (06 Nov, spot 1.1075) wherein EUR is expected to “trade with a downside bias towards 1.1000”. After the relatively weak daily closing on Friday, the risk for a sustained decline below 1.1000 has increased slightly. However, there is another strong support at 1.0970 and only a clear break of this level would suggest EUR is ready to tackle 1.0930. All in, EUR is expected to stay under pressure unless it can move above 1.1090 (‘strong resistance’ level was at 1.1125 last Friday)."