In the opinion of UOB Group currency strategists, EUR / USD comes under pressure as long as it remains below the 1.1980 level In the next weeks.
24 hour view: “Yesterday, we are of the opinion that the EUR / USD rebound ‘has room to extend, but any advance is likely to be limited to a test of 1.1940’. While EUR / USD advanced as expected, it did not test 1.1940 (the high was 1.1929). The bias still appears to be to the upside, but while a breakout of 1.1940 would not be surprising, strong resistance at 1.1980 is unlikely to enter the picture. Support is at 1.1900 followed by 1.1875 “.
Next 1-3 weeks: “We have had a negative view on the EUR / USD since the beginning of the month. In our latest narrative yesterday (Mar 9, EUR / USD at 1.1850), we highlighted that ‘we continue to expect EUR / USD to move lower to 1.1800’. Subsequently, the EUR / USD fell to 1.1834 before making a strong rebound. Short-term momentum is starting to wane, but the overall negative phase is intact unless there is a breakout of 1.1980 (no change at the ‘strong resistance’ level). In view of the oversold conditions, the EUR / USD could not afford to waver or the odds of a move to 1.1800 would diminish rapidly. “