UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang note the EUR/USD risks further pullbacks in the near term.

Key Quotes

24-hour view: Yesterday, EUR traded on a relatively quiet note between 1.0875 and 1.0916 before closing on a soft note at 1.0877 (-0.31%). Today, there is room for EUR to edge lower, but in view of the mild downward pressure, any decline is unlikely to break 1.0835 (there is another support at 1.0855). On the upside, a breach of 1.0920 (minor resistance is at 1.0900) would indicate the current mild downward pressure has faded. 

Next 1-3 weeks: While EUR traded mostly sideways over the past few days, the underlying tone appears to be soft, and the bias is tilted to the downside.  However, any decline is likely to face solid support at 1.0835, ahead of another major support at 1.0805. The downward bias is intact as long as EUR stays below 1.0950 (‘strong resistance’ level).