EUR/USD could slip back below 1.0500 – UOB

In the view of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, further weakness could drag EUR/USD back below the 1.0500 region in the near term.

Key Quotes

24-hour view: “Our view for EUR to rise above 1.0700 was incorrect as it plunged to a low of 1.0544 in NY trade. While EUR could weaken further, any decline is unlikely to break the major support at 1.0485 today (there is another support at 1.0530). Any rebound is likely to stay below 1.0610 (minor resistance is at 1.0580).”

Next 1-3 weeks: “Yesterday (07 Mar, spot at 1.0685), we highlighted that EUR appears poised to head higher towards 1.0750. We added, ‘On the downside, a breach of the ‘strong support’ level, currently at 1.0615, would indicate that the upside risk has faded’. Our view was invalidated quickly as EUR plunged to a low of 1.0544 in NY trade. Downward momentum has improved, albeit not much. From here, as long as EUR does not move above 1.0650 (‘strong resistance’) in the next few days, it is likely to gravitate lower towards 1.0485.”