EUR/USD still room for a test of 1.0900 – UOB

FX Strategists at UOB Group suggest there is still a possibility for EUR/USD to visit the 1.0900 area in the next weeks.

• "24-hour view: Yesterday, we expected EUR to “drift lower” but were of the view that “the 1.0930 support is unlikely to come under serious threat”. While EUR moved below 1.0930, it staged a robust rebound after touching 1.0924. Downward momentum has eased with the recovery and the 1.0924 low is deemed a short-term bottom. For today, EUR is expected to trade sideways above 1.0924, likely between 1.0940 and 1.1010.
• Next 103 weeks: While the 1.0930 level that was first highlighted on Monday (02 Sep, spot at 1.0990) came into the picture sooner than expected, the rapid bounce from 1.0924 yesterday (03 Sep) has dented the downward momentum in EUR. For now, there is still chance (albeit not very high) for EUR to test the next support at 1.0900. Overall, the decline in EUR could not afford to ‘dither’ as a prolonged consolidation around these levels would lead to a rapid loss in momentum. On the upside, a break of 1.1045 (no change in ‘key resistance’ level) would indicate that the current weakness in EUR has stabilized."