EUR/USD expected to break below 1.1105/10 – UOB

In opinion of FX Strategists at UOB Group, the pair remains poised for a pullback to the vicinity of the 1.1100 handle.

Key Quotes

“Expectation for a short-term low was wrong as EUR dropped sharply to hit an overnight low of 1.1141. The down-move appears incomplete and further weakness is expected but at this stage, a clear break below the major 1.1105/10 support seems unlikely”.

“EUR declined sharply yesterday after edging above the key short-term resistance at 1.1210 (high of 1.1213). The pace and extent of the drop and the subsequent weak daily closing has shifted the pressure towards the downside again. That said, EUR has to break clearly below 1.1105/10 to indicate that it has moved into a bearish phase. This scenario seems likely unless EUR can move and stay above 1.1200 within these 1 to 2 days. Looking further ahead, a break below 1.1105/10 would indicate that a move lower towards 1.1025 has started”.