EUR/USD risks further decline once 0.9900 is cleared – UOB

FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang suggest EUR/USD could accelerate losses on a close below 0.9900.

Key Quotes

24-hour view: “EUR popped to a high of 1.0033 during NY session before dropping sharply to a low of 0.9941. EUR opened on a weak note in Asia and the improving downward momentum is likely to lead to a break of 0.9900. For today, the next support at 0.9850 is unlikely to come under threat. Resistance is at 0.9945 followed by 0.9970.”

Next 1-3 weeks: “Last Friday (02 Sep, spot at 0.9945), we highlighted that the risk for EUR has shifted to the downside. We added, EUR has to close below the major support at 0.9900 before a sustained decline is likely. EUR subsequently popped to within a couple of pips of our ‘strong resistance’ at 1.0035 (high of 1.0033) before dropping back down quickly. We continue to hold the same view as long as the ‘strong resistance’ level at 1.0005 (level was at 1.0035 last Friday) is not breached. Looking ahead, the next level to monitor below 0.9900 is at 0.9850.”