FX Strategists at UOB Group suggested EUR/USD could still resume the downside in the next weeks.
Key Quotes
24-hour view: “Yesterday, we held the view that the ‘sharp drop in EUR could extend but the major support at 1.1105 is unlikely to come under threat’. However, EUR recovered some of its initial steep decline as it rebounded to close at 1.1219 (-0.43%). Downward pressure appears to have eased and EUR is likely to trade sideways for today, expected to be within a range of 1.1160/1.1260.”
Next 1-3 weeks: “We have held a negative view for more than 2 weeks now. After EUR plunged to 1.1105, we highlighted last Friday (25 Feb, spot at 1.1205) that further EUR weakness is not ruled out but EUR could trade above 1.1105 for a couple of days first. There is no change in our view even though downward momentum is showing tentative signs of easing. Overall, only a breach 1.1290 (no change in ‘strong resistance’ level) would indicate that EUR is not ready to move below 1.1105. Looking ahead, below 1.1105, there is another is another strong support at 1.1080.”