EUR/USD could slip back to 1.1670 – UOB

FX Strategists at UOB Group noted EUR/USD risks a deeper pullback on a breach of 1.1700 in the near term.

Key Quotes

24-hour view: “We did not anticipate the sharp drop yesterday that sent EUR to a low of 1.1708. While quickly approaching oversold, the weakness in EUR could break the very solid support at 1.1700. The next support is at 1.1670. All in, EUR is expected to trade under pressure unless it can move above 1.1750 (minor resistance is at 1.1730).”

Next 1-3 weeks: “Our view from two days ago (16 Aug, spot at 1.1795) where EUR could edge higher to 1.1845 was proven wrong quickly as it plummeted yesterday and took out our ‘strong support’ level at 1.1735 (low of 1.1708). The sharp and rapid improvement in downward momentum has shifted the risk to the downside. A break of the solid support at 1.1700 would open up the way for EUR to move lower to 1.1670 (next support is at 1.1640). The downside risk is deemed intact as long as EUR stays below the ‘strong resistance’ level (currently at 1.1775).”