EUR/USD: A sustained drop below 0.9900 looks unlikely – UOB

FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang note that a continuous decline below the 0.9900 level appears not favoured in EUR/USD.

Key Quotes

24-hour view: “We expected EUR to ‘trade sideways between 0.9950 and 1.0020’ yesterday. Our view for sideway-trading was correct even though EUR traded within a narrower range than expected (0.9954/1.0017). The price actions still appear to be part of a consolidation phase and we continue to expect EUR to trade sideways, albeit likely at a higher range of 0.9965/1.0040.”

Next 1-3 weeks: “EUR traded in a quiet manner the past couple of days and we continue to hold the same view as from Wednesday (14 Sep, spot at 0.9980).  As highlighted, EUR is under pressure but at this stage, a sustained decline below the major support at 0.9900 appears unlikely. On the upside, a breach of 1.0070 (no change in ‘strong resistance’ level from yesterday) would indicate that the current downward pressure has eased.”