Further declines are not ruled out; clear positive divergence suggests EUR may not be able to reach 1.1450 today. In the longer run, EUR is expected to weaken further; the next level to watch is 1.1450, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Further declines are not ruled out

24-HOUR VIEW: "The following are excerpts from our update yesterday: 'EUR may just have enough momentum to test 1.1490 today before the risk of a recovery increases. A sustained break below 1.1490 appears unlikely. The next support at 1.1450 is also unlikely to come under threat'. However, EUR fell more than expected to a low of 1.1472 before closing lower for the fifth straight day at 1.1482 (-0.31%). While further declines are not ruled out, downward momentum is tentatively slowing. This, combined with clear positive divergence, suggests EUR may not be able to reach 1.1450 today. Resistance is at 1.1500; a break above 1.1515 would indicate that the decline is stabilising."

1-3 WEEKS VIEW: "We turned negative on EUR late last week. Tracking the subsequent decline, in our most recent narrative from two days ago (03 Nov, spot at 1.1535), we pointed out that 'the next level to watch is 1.1490'. Yesterday, we pointed out that, 'looking ahead, if EUR breaks below 1.1490, the focus will shift to 1.1450'. EUR then dropped to a low of 1.1472 in the NY session. We continue to expect EUR to weaken, and this time around, the next level to watch is 1.1450. If EUR breaks below this level, the focus will then shift to August’s low, near 1.1390. Overall, only a breach of 1.1555 (‘strong resistance’ level was at 1.1580 yesterday) would indicate that EUR is not weakening further."