Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group suggest EUR/USD risks a potential drop to the 1.0700 region in the next few weeks.

Key Quotes

24-hour view: “Our expectation for EUR to trade in a range was incorrect as it lurched lower and plummeted by 1.07% (NY close of 1.0793). Strong downward momentum suggests EUR could drop below 1.0755, the next support at 1.0700 is unlikely to come under threat today. Resistance is at 1.0825, followed by 1.0855.”

Next 1-3 weeks: “Last Friday (03 Feb, spot at 1.0905), we indicated that there was a rapid loss in upward momentum. However, we were of the view that EUR could consolidate between 1.0820 and 1.1020 first before heading higher. During NY trade, EUR plunged to a low of 1.0790. The price actions are likely the early stages of a pullback. The pullback could extend to 1.0700. Looking ahead, the next major support below 1.0700 is at 1.0615. Overall, only a breach of 1.0890 would indicate that the downside risk has subsided.”