The EUR/USD reversed its downside drift and edged higher through the 1.1300 support. However, the recovery in EUR/USD has lost legs just as the pair now inches lower towards 1.1300. Economists at OCBC expect EUR/USD to continue moving downward.

Focus on medium-term downside

“Expect firmer resistance towards 1.1380. A breach of that level may see the pair turn positive in the near-term on technical grounds.” 

“The underlying Fed-ECB divergence theme is unchanged, and any EUR/USD bounce could be short-lived.”