EUR/USD risks a move to 1.1280 – UOB

FX Strategists at UOB Group suggested EUR/USD could drop further and revisits 1.1280 in the next weeks.

Key Quotes

24-hour view: “We expected EUR to trade sideways between 1.1330 and 1.1395 last Friday. However, it dropped to 1.1313 before closing on a soft note at 1.1313 (-0.34%). Downward momentum is beginning to build and there is room for EUR to test the strong support at 1.1300. As the decline is approaching oversold levels, a sustained decline below 1.1300 is unlikely (next support is at 1.1280). Resistance is at 1.1350 followed by 1.1375.”

Next 1-3 weeks: “We have expected EUR to weaken for more than a week now. In our latest narrative from last Friday (18 Feb, spot at 1.1370), we highlighted that downward momentum has waned and odds for further EUR weakness have diminished. We added, ‘in order to rejuvenate the flagging momentum, EUR has to move and stay below 1.1310 within these 1 or 2 days’. EUR subsequently dropped to 1.1313 before closing on a soft note at 1.1321 (-0.34%). While 1.1310 was not breached, downward momentum is beginning to build again and EUR could head lower to 1.1280 (the next support is at 1.1240). Overall, in order to maintain the build-up in momentum, EUR has to stay below 1.1400 (no change in ‘strong resistance’ level from last Friday).”