Further decline lies ahead for EUR/USD once 1.0920 is cleared, comment UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB.

Key Quotes

24-hour view: “Yesterday, we held the view that ‘there is scope for EUR to drop to 1.0920 before stabilization is likely’. However, EUR traded in a quiet manner until NY time when it swung between 1.0940 and 1.1006 before settling at 1.0980 (+0.18%). The price actions appear to be part of a consolidation phase. In other words, we expect EUR to trade sideways today, likely in a range of 1.0950/1.1005.”

Next 1-3 weeks: “Our update from yesterday (10 May, spot at 1.0960) is still valid. As highlighted, short-term downward momentum appears to be building but EUR has to break and stay below 1.0920 before a sustained decline is likely. The chance for EUR to break clearly below 1.0920 is not high for now but it will remain intact as long as EUR stays below 1.1035 in the next few days. Looking ahead, the next support below 1.0920 is at 1.0885.”