In the opinion of the currency strategists at UOB Group, EUR / USD bias has now moved lower.
Key Comments:
24 hour view: “We expected the EUR / USD to weaken yesterday, but we are of the opinion that ‘the 1.2045 level is unlikely to enter the scene.’ The subsequent weakness exceeded our expectations as the EUR / USD tumbled to 1.2021. The rapid decline appears to be oversold, but there is room for EUR / USD to test solid support at 1.2000 first before a more sustained recovery can be expected. Minor support is at 1.2020. On the upside, resistance is at 1.2065 followed by 1.2095 ”.
Next 1-3 weeks: “We highlighted yesterday (Feb 17, EUR / USD at 1.2095) that ‘bullish momentum has deteriorated’ and ‘a breakout of 1.2045 would indicate that 1.2169 is the extent of the recent strength of EUR / USD.’ EUR / USD broke out easily at 1.2045 and down to 1.2021. Short-term bearish momentum has improved and the bias has shifted lower towards 1.2000. A daily close below this solid support would open the way for EUR / USD to move towards the lower. monthly low at 1.1950. Overall, the EUR / USD is considered to be under pressure unless it can pull back above 1.2125 (‘strong resistance’ level). “
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