EUR/USD risks a probable drop to 1.0720 – UOB

UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang suggest further downside could drag EUR/USD to the 1.0720 region in the next few weeks.

Key Quotes

24-hour view: Our expectations for EUR to break below 1.0765 did not materialise. Instead, EUR traded in a relatively narrow range between 1.0770 and 1.0808 before closing at 1.0794 (+0.19%). Momentum indicators are mostly flat, suggesting EUR is likely to trade sideways today, probably between 1.0770 and 1.0820. 

Next 1-3 weeks: We continue to hold the same view as yesterday (04 Sep, spot at 1.0775). As highlighted, there is a tentative buildup of downward momentum. This could cause EUR to edge lower to 1.0720. Looking ahead, EUR must break and stay below 1.0720 before a sustained decline can be expected. On the upside, if EUR breaks above 1.0860, it would mean that the momentum buildup has faded.