EUR/USD is facing strong support around 1.0470 – UOB

Quek Ser Leang, Market Strategist at UOB Group, and Peter Chia, a senior currency strategist, point out that EUR/USD is expected to continue lower and find solid support around 1.0470.

24 hour perspective: “Yesterday we expected the EUR to rise, but we were of the view that the main resistance at 1.0800 was not expected to be threatened. The Euro rallied as high as 1.0759 before falling, plunging 1.46% (1.0575 at NY close), its biggest drop in one day since September last year. Although the Euro could weaken further, a clear break of 1.0500 is unlikely. Resistance is at 1.0610; A break of 1.0640 would indicate that the Euro is unlikely to test 1.0500.”

Next 1-3 weeks: “Our last analysis was from Monday (March 13, pair at 1.0685) when we thought the Euro was likely to consolidate between 1.0560 and 1.0800. Yesterday the Euro rallied as high as 1.0759 London time before falling below 1.0560 (the low was 1.0514).Although the sudden drop seems to be too fast and too soon, the risk that the euro will continue to fall has increased. However, 1.0470 is important support, and it remains to be seen if the Euro can break this level. In general, only a break of the strong resistance 1.0680 in the next few days would indicate that the downside risk has faded.”