EUR/USD could weaken to the 1.0840 area – UOB

FX Strategists at UOB Group noted EUR/USD could accelerate the drop and test the 1.0840 zone on a breakdown of 1.0870 in the next weeks.

Key Quotes

24-hour view: “Expectation for EUR to “trade sideways to slightly higher” was incorrect as it lurched lower and touched 1.0883 before recovering slightly. Downward momentum has picked up and the immediate risk is still on the downside. From here, barring a move above 1.0930 (minor resistance is at 1.0915), EUR is likely to test the 1.0870 support. For today, the next support at 1.0840 is unlikely to come under threat”.

Next 1-3 weeks: “EUR lurched lower and came close to the 1.0870 level that was first indicated last Friday (27 Sep, spot at 1.0920). Downward momentum has improved and from here, a break of 1.0870 would suggest EUR could weaken further to 1.0840. All in, EUR is expected to remain under pressure in the coming days unless it can move above 1.0960 (‘strong resistance’ level was at 1.0990 yesterday)”.