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UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang suggested there is still scope for EUR/USD to drop to the 1.0630 region in the near term.

Key Quotes

24-hour view: We expected EUR to trade in a range between 1.0700 and 1.0750 yesterday. However, it dropped to a low of 1.0685 before ending the day at 1.0699 (-0.26%). While the decline lacks momentum, the weakness in EUR has not stabilised just yet. Today, EUR could continue to weaken, even though the major support at 1.0635 is highly likely out of reach (there is another support at 1.0660). Resistance is at 1.0715; if EUR breaks above 1.0735, it would suggest that the weakness in EUR has stabilised. 

Next 1-3 weeks: Our update from two days ago (06 Sep, spot at 1.0725) still stands. As highlighted, EUR is likely to continue to weaken, and the next level to watch is May’s low of 1.0635. However, if EUR breaks above the ‘strong resistance’ at 1.0765 (level was at 1.0785 yesterday), it would mean that the EUR weakness that started early this week has stabilised. Looking ahead, if EUR breaks below 1.0635, the focus will shift to the year’s low near 1.0515. 

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