FX Strategists at UOB Group keep the bearish view on spot unchanged and expect a visit to 2019 lows in the next weeks.
24-hour view: “We highlighted yesterday EUR “could dip below last week’s 1.1065 low but a sustained decline below this level is unlikely”. EUR subsequently touched 1.1064 before rebounding quickly. Downward pressure eased with the recovery and the current movement is viewed as part of a consolidation phase. In other words, EUR is expected to trade sideways, likely between 1.1075 and 1.1125”.
Next 1-3 weeks: “EUR dipped briefly yesterday but rebounded after testing Monday’s (19 Aug) low of 1.1065 (overnight low of 1.1064). The price action offers no fresh clues and for now, we continue to hold the view that there is scope for EUR to retest the early August low of 1.1025. As indicated on Monday (19 Aug, spot at 1.1095), it is unclear at this stage whether there is enough momentum to break the crucial 1.1000 level (even though after the lackluster price action over the past two days, the prospect for a break of this level is not high). That said, EUR is expected to stay under pressure unless it can move above 1.1160 (no change in ‘key resistance’ level)”.