UOB Group’s Economist Lee Sue Ann and Market Strategist Quek Ser Leang note further downside in EUR/USD should meet firm contention around 1.0790.

Key Quotes

24-hour view: “We did not expect the rapid drop in EUR to 1.0830 (we were expecting it to trade sideways). While the sharp drop appears to be running ahead of itself, there is scope for EUR to retest the 1.0830 level before a more sustained rebound is likely. The next major support at 1.0785 is unlikely to come into view. On the upside, a breach of 1.0895 would suggest that 1.0830 is not coming back into view for now.”

Next 1-3 weeks: “Yesterday (10 Apr, spot at 1.0905), we held the view that EUR is likely to consolidate between 1.0870 and 1.0970 before heading higher at a later stage. We did not anticipate the rapid drop below 1.0840 (low has been 1.0830). Downward momentum has improved somewhat and EUR is likely to edge lower for the time being. In view of the mild downward pressure, any decline is likely limited to a test of 1.0785. EUR is likely to edge lower as long as it stays below the ‘strong resistance’ level, currently at 1.0940 in the next few days.”