EUR/USD now eyes a test of 1.1660 – UOB

The pair’s decline could head towards the 1.1660 area in the next weeks, argued FX Strategists at UOB Group.

Key Quotes

24-hour view: “The weakness in EUR once again exceeded our expectation as the sharp decline took out the major supports at 1.1800 and 1.1770 with ease. However, the sharp rebound from the overnight low of 1.1756 suggests that this pair is trying to form a temporary base. That said, stabilization is only upon a move back above 1.1835 (minor resistance is at 1.1805). Until then, another dip lower towards 1.1720/25 is not ruled out but based on the current oversold conditions, a clear break below 1.1700 seems unlikely”.

Next 1-3 weeks: “While we highlighted yesterday that the “risk of a deeper pull-back has increased considerably”, the rapid pace of the decline was not exactly expected. The outlook for EUR is still clearly negative and further weakness towards the August’s low of 1.1660 would not be surprising. Overall, EUR is expected to continue to stay under pressure in the coming days and only a move back above 1.1880 would indicate that the current weakness has stabilized”.