EUR/USD bearish on a close below 1.1660 – UOB

In view of FX Strategists at UOB Group, the outlook on the pair should shif to bearish from neutral on a daily close below 1.1660.

Key Quotes

24-hour view: “Expectation for EUR to trade sideways was wrong as it dropped sharply to a low of 1.1697. While the decline appears to be running ahead of itself, there is scope for further weakness towards the major 1.1660 support. At this stage, this critical level is expected to offer solid support but a clear break could lead to acceleration lower towards 1.1615. On the upside, stabilization is only upon a move back above 1.1780 (minor resistance is at 1.1740)”.

Next 1-3 weeks: “We have held the same view that the weakness in EUR has ‘scope to extend further to 1.1660” since last Wednesday (27 Sep). This level appears to be within striking distance and from here, the odds for a sustained move below this level has increased. To put it another way, the current neutral phase would shift to bearish if NY closing is below 1.1660. If this condition is met, we would anticipate a move below the next major support at 1.1615 (for a move to 1.1500). Overall, only a move 1.1780 would indicate that the current weak phase has stabilized (key resistance was previously at 1.1820)”