According to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, EUR/USD still risks a drop to the mid-1.0800s in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that EUR ‘could weaken further but oversold conditions suggests the next support at 1.0855 is likely out of reach’. We added, ‘there is another support at 1.0880’. Our view was not wrong as EUR dropped to 1.0873 before rebounding to close little changed at 1.0893 (-0.09%). Downward momentum has waned somewhat and this coupled with still oversold conditions suggests EUR is unlikely to weaken much further. For today, EUR is likely to trade between 1.0870 and 1.0935.”

Next 1-3 weeks: “Our narrative from yesterday (06 Apr, spot at 1.0905) still stands. As highlighted, the outlook for EUR is still negative and the next levels to focus on are at 1.0855 and 1.0820. That said, shorter-term conditions are oversold and this could lead to 1-2 days of consolidation first. Overall, only a breach of 1.0975 (‘strong resistance’ level was at 1.1000 yesterday) would indicate that the current downward pressure has eased.”