Euro (EUR) fell to a low of 1.0225 (2 Jan) before rebounding. The large slippage was likely due to poor market liquidity. Pair was last seen trading at 1.0353 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Dovish expectation on ECB cut trajectory may unwound

“Mild bearish momentum on daily chart shows tentative signs of moderating while RSI rose. Rebound not ruled out.”

“In the event CPI comes in firmer, then dovish expectation on ECB cut trajectory may unwound. And that can add to EUR’s rebound momentum.”