The currency strategists of UOB Group noted that EUR / USD could fall back to the 1.1920 region if the 1.1975 zone clears in the coming weeks.
24 hour perspective: “Our expectation that the EUR would trade sideways was incorrect as it plunged to 1.1997 before closing on a soft note at 1.2013 (-0.40%). While it is oversold, the steep euro decline has room to test the main support at 1.1975 first before stabilization can be expected. Resistance is at 1.2030 followed by 1.2050 ”.
Next 1-3 weeks: “We continue to maintain the same vision of two days ago (May 3, even at 1.2030). As highlighted, the short-term bias is sloping to the downside, but the EUR has to break the main support at 1.1975 before a more sustained (and substantial) pullback can be expected. The bearish momentum has improved and a breakout of 1.1975 would suggest that the euro could weaken to 1.1920. The current downside pressure is considered intact as long as the EUR does not move above 1.2080 (the ‘strong resistance’ level was previously 1.2105). “
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