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The pair’s breach of the 1.1450 area should lead to a test of 1.1390 in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Expectation for a dip below 1.1450 did not materialize as EUR staged a smart rebound from a low of 1.1462. Downward pressure has eased and 1.1462 is likely a temporary bottom. From here, we expect EUR to consolidate its recent loss and trade sideways to slightly higher, likely between 1.1485 and 1.1555″.

Next 1-3 weeks: “EUR edged below Wednesday’s 1.1463 low to touch 1.1462 before staging a rapid and robust recovery. We indicated yesterday, “1.1450 appears to be within reach sometime in the next 24 to 36 hours” and after the sharp bounce yesterday, the prospect for a move to 1.1450 have diminished. That said, the outlook for the next several days is still ‘negative’ and only a break of the ‘key resistance’ at 1.1580 (no change in level) would indicate that a short-term bottom is in place. Until then, there is still chance EUR could break 1.1450 in the coming days and this would shift the focus to the next support at 1.1390. However, as highlighted yesterday, we have reservations about the sustainability of the current EUR weakness and we doubt EUR is ready to move into a bearish phase”.