The currency strategists of UOB Group suggest that the next level to watch for in EUR / USD is now 1.2250.
24 hour perspective: “Yesterday, we held the view that the rapid decline was oversold, but there was room for the EUR to first test 1.2125 before stabilization could be expected. However, the euro failed to test 1.2125 as it rallied strongly from 1.2135 to a high of 1.2209. The rapid rise seems to be ahead of itself, but further progress is not ruled out. Having said that, a clear breakout of the strong resistance situated at 1.2250 is unlikely (the next resistance is at 1.2280). Support is at 1.2180 followed by 1.2155 “.
Next 1-3 weeks: “We highlighted yesterday (Jan 12, pair at 1.2185) that the possibility of the EUR moving to 1.2080 had increased. We add that the current downside pressure was considered intact as long as it did not move above the strong resistance level at 1.2250. While the strong resistance level is still intact, the relatively strong bounce of + 0.48% (1.2207) has affected the bearish momentum. A breakout of 1.2250 would not be surprising and would indicate that the EUR is not ready to move to 1.2080. To rejuvenate the weakening of the bearish momentum, the euro has to move and stay below 1.2155 within this 1 or 2 days or 1.2080 is unlikely to enter the scene. “