In the opinion of the currency strategists of UOB Group, the EUR/USD it could extend the downtrend to the mid-1.2000s in the coming weeks.
24-hour perspective: “We do not anticipate the strong sell-off in the EUR until 1.2116 yesterday. While the sharp and rapid decline is oversold, the strong downside momentum suggests the euro could weaken further to 1.2095 (minor support is at 1.2110). The resistance is at 1.2150but only a breakout of 1.2165 would indicate that downside risk has dissipated. “
Next 1-3 weeks: “We have expected the EUR to trade between 1.2150 and 1.2265 since the beginning of the week. Yesterday (Jun 3, pair at 1.2210), we indicated that the euro had to close below 1.2150 or above 1.2265 before a sustained directional move could be expected. However, we did not expect the sharp decline during the New York session that sent the EUR to a low of 1.2116 and the subsequent weak close at 1.2124 (-0.70%). Strong bearish momentum is likely to lead to further EUR weakness to 1.2095. There is scope for the weakness to extend to 1.2050But at this stage, the outlook is not high. In general, the EUR is expected to remain under pressure as long as it does not move above the ‘strong resistance’ at 1.2200 “.
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