According to FX Strategists at UOB Group Quek Ser Leang and Peter Chia, the outlook for EUR/USD remains negative and the pair could slip back to the 1.0855 region in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that EUR ‘could dip below 1.0940 but a sustained decline below this level appears unlikely’. We added, ‘the next support at 1.0900 is not expected to come under threat’. EUR did not breach 1.0940 until NY session where it plunged to a low of 1.0898. Strong downward momentum suggests EUR could weaken further. However, in view of the oversold conditions, the next support at 1.0855 is likely out of reach (there is another support at 1.0880). Resistance is at 1.0930 followed by 1.0960.”

Next 1-3 weeks: “We turned negative on EUR yesterday (05 Apr, spot at 1.0975). We indicated that EUR could drop below 1.0940 but odds for a break of the next support at 1.0900 are not high. We did not anticipate the subsequent sharp drop to 1.0898. Downward momentum has improved and the outlook for EUR is still negative. The next level to focus on is at 1.0855. A breach of 1.0855 would expose a major support level at 1.0820. The downside risk is intact as long as EUR does not move above 1.1000 (‘strong resistance’ level was at 1.1060 yesterday).”