EUR/USD: A test of the 1.10 level is on the cards – OCBC

EUR/USD touched below 1.1100 briefly before rebounding higher. The market may be expecting further downside moves, therefore, economists at OCBC Bank do not rule out a test towards 1.1000.

Potential for further downside

“Movements in the options space (EUR and GBP puts favoured, implied vols spiking) suggest potential for further downside.”

“Structurally, Europe has the most to lose on the macro front, and the ECB is likely most open to dovish u-turns at this juncture.” 

“Do not rule out a test towards 1.1000.”