FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang note a break above 1.0050 should alleviate the ongogin downside pressure around EUR/USD.

Key Quotes

24-hour view: “We expected EUR to ‘edge higher’ yesterday but we were of the view that ‘any advance is unlikely to challenge the major resistance at 1.0070’. We added, ‘there is another resistance at 1.0050’. EUR subsequently popped briefly to 1.0050 before selling off sharply to a low of 0.9953 during NY session. The rapid drop has gathered momentum and EUR is likely to decline today. That said, any weakness is unlikely to break the solid support at 0.9900 (there is another support at 0.9930). Resistance wise, a breach of 1.0025 (minor resistance is at 1.0000) would indicate the current downward pressure has eased.”

Next 1-3 weeks: “Our latest narrative was from last Wednesday (14 Sep, spot at 0.9980) where while EUR is under pressure, a sustained decline below the major support at 0.9900 appears unlikely. There is no change in our view for now. On the upside, a breach of 1.0050 (‘strong resistance’ level was at 1.0070 yesterday) would indicate that the current downward pressure has eased.”