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The pair could drop further and test 1.1285 in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected further weakness in EUR yesterday but highlighted that “the major 1.1285 support is likely out of reach”. In line with expectation, EUR weakened and reached a low of 1.1297 before staging a relatively robust recovery. The recent downward pressure has eased with the rebound and EUR has likely moved into a consolidation/correction phase. In other words, we expect EUR to trade sideways to slightly higher from here, likely within a 1.1315/1.1375 range”.

Next 1-3 weeks: “We have held the same view since Monday (13 Aug, spot at 1.1400) that there is “room for further weakness” in EUR and the price action since then coincides with our expectation. EUR dipped to an overnight low of 1.1297 and as highlighted yesterday (15 Aug), the next ‘target’ at 1.1285 is likely within reach this week. That said, short-term indicators are at severely ‘oversold’ levels and this coupled with signs of momentum waning could lead to a couple of days of consolidation first. In other words, we do not expect the next major support at 1.1185 to come into the picture so soon. On the upside, the current ‘stop-loss’ level remains at 1.1460 even though 1.1430 is likely strong enough to cap any bounce in EUR within the next couple of days”.