EUR/USD: Scope for a nosedive to the 1.1704 mark – OCBC

The post-FOMC USD surge persisted on Friday, with the USD broadly firmer across the G-10 space. Key support levels on the EUR/USD were breached, leaving the pair still biased lower, for now, economists at OCBC Bank report.

Comments from Bullard about a late-2022 lift-off gave more credence to the dot plot

“The rapid breach of supports post-FOMC may signal more downside for the EUR/USD.” 

“Juxtapose Bullard’s late-2022 lift-off against comments from ECB’s Lane pushing back against looking at the Sep ECB meeting as a key meeting to reduce monetary support. This should reinforce the divergence between the two, and leave the EUR/USD impinged on a structural basis.”

“1.1800 and the April low at 1.1704 may be a multi-session target for now.”