In the opinion of the currency strategists at UOB Group, further pullbacks in the EUR / USD pair appear to have lost some traction in the near term.
24 hour view: “Yesterday, we highlighted that ‘there is room for EUR / USD to fall below 1.2020 before a recovery can be expected.’ We add, the next support at 1.1985 is unlikely to be threatened. ‘ was incorrect as EUR / USD fell to 1.1990, we do not anticipate the quick and sharp rebound from the low (prior day high 1.2094). The recovery could extend but any advance is likely to be limited to a test of 1.2110 Strong resistance at 1.2135 is unlikely to enter the scene. Support is at 1.2060 followed by 1.2030 “.
Next 1-3 weeks: “On Monday (March 1, EUR / USD at 1.2085), we highlighted that ‘the downside risk has increased and the EUR / USD could fall to 1.2020’. Thereafter, the EUR / USD fell to 1.2026 and yesterday ( March 2) we noted that ‘the risk remains to the downside and the next support below 1.2020 is at 1.1985.’ EUR / USD approached 1.1985 as it fell to 1.1990 during London hours yesterday before taking a strong bounce. Bearish momentum has faded, but as long as 1.2135 (no change at ‘strong resistance’ level) is intact, there is still a chance, albeit slim, that EUR / USD will run lower again. That said. , to rejuvenate the weakening momentum, the EUR / USD has to move and stay below 1.2030 in these 1 or 2 days or a breakout of 1.2135 would not be surprising ”.