EUR/USD: A Break Below 1.0640 Would Extend Losses

Analysts at UOB noted that EUR/USD could fall further, but it is unclear whether it can break through the important support level of 1.0640. If it breaks, the euro may continue to fall.

EUR stabilizes above 1.0730

24-hour view: “Two days ago, EUR/USD fell to 1.0689 before rebounding. Yesterday, we noted that ‘momentum has slightly increased’. We noted that EUR ‘could break below the 1.0689 low and was unlikely to threaten the important support of 1.0670. The decline of EUR exceeded our expectations and it fell to a low of 1.0664. Today, EUR may fall further, but it is unclear whether it can break the important support of 1.0640. Note that 1.0665 is still a fairly strong support level. Resistance is at 1.0695; if it breaks 1.0710, it means that the decline of EUR has stabilized.

1-3 week view: “Our last view was from two days ago (June 25, spot price was 1.0730), that EUR ‘has probably entered a consolidation phase and is likely to trade between 1.0670-1.0800’. Yesterday, the euro fell to a low of 1.0664. Downward momentum has been re-accumulated, but at this stage, this does not seem to be enough to indicate the beginning of a sustained decline in the euro. In addition, 1.0640 is an important support level. That is, as long as 1.0730 is not broken, the euro may continue to be under pressure, but a sustained decline is only possible if 1.0640 is clearly broken.

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