EUR/USD could slip back to the mid-1.1700s

According to FX Strategists at UOB Group, EUR/USD could drop to the 1.1750 in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that ‘EUR could take a breather and trade sideways for today, likely between 1.1810 and 1.1870’. EUR subsequently traded within a narrower range than expected (between 1.1810 and 1.1848). While the quiet price actions offer not many clues, the daily closing is on the soft side (NY close of 1.1817, -0.18%) and EUR could drift lower from here. That said, the major support at 1.1750 is not likely to come into the picture (1.1780 is already quite a strong support). On the upside, a break of 1.1850 would indicate the current mild downward pressure has eased.”

Next 1-3 weeks: “We highlighted last Thursday (03 Sep, spot at 1.1830) that EUR has likely moved into a consolidation phase but is likely to test the bottom of the expected 1.1750/1.1950 range first. While EUR did not ‘test’ 1.1750 last Friday as it rebounded quickly from 1.1779, the underlying tone still appears to be on the soft side. In other words, there is no change to our view wherein EUR is trading in a consolidation phase but is likely to test the bottom of the range first.”

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