EUR/USD Price May Drop Soon - SHORT

According to the Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia from UOB Group, there is a possibility of a further decline in the EUR/USD exchange rate in the near future. In their recent analysis, they highlighted that the EUR could weaken further but a clear break of 1.0500 is unlikely. Although the EUR traded mostly sideways with a brief drop to 1.0548 in London trade, the price movements appear to be consolidative, and further sideways trading is likely.

Looking at the next 1-3 weeks, the strategists pointed out that the EUR has already plunged to a low of 1.0514, and while the rapid drop appears to be too fast, too soon, the risk of EUR dropping further has increased. It remains to be seen if EUR can break the major support at 1.0470. The strategists maintain their view that only a breach of the strong resistance level at 1.0680 would indicate that the downside risk has faded. Therefore, traders need to remain vigilant and watch out for any significant movements in the exchange rate in the coming days.