The EUR/USD touched low at 1.1106 before staging a rebound above 1.1200. Still, economists at OCBC Bank believe that another leg lower towards 1.1100 is on the cards.

Potential for further downside

“Headlines will take over for this session, and the risk into next week is further escalation over the weekend. Thus, the pair may not be out of the woods just yet, and a retest of 1.1100 cannot be ruled out.”

“Further out, the question is whether this conflict will upend the ECB’s and other central banks’ playbook, and spark a more structural change in overall trajectory for the pair. We hold our horses for that for now.”