EUR/USD to accelerate the decline on break below 1.1650 – OCBC

With the underlying risk-off tilt still likely in place, Terence Wu, FX strategists at OCBC Bank, expects the broad USD to stay buoyant into the end of the week. The analyst is also turning more negative on the euro on the back of softening macro recovery and a return to increased restrictions. The EUR/USD pair is currently trading at 1.1675, representing a 1.4% decline on a week-to-date basis.

Key quotes

“No change in our stance that the EUR/USD pair should be biased lower, given that data releases continue to underperform and virus cases pick up.”

“Downside momentum should be accelerated once the 1.1650 handle is breached convincingly.”

“Note that short-term implied valuations have already turned south, with spot now 2 SD higher than the implied EUR/USD value.”