In the opinion of the currency strategists at UOB Group, EUR / USD could fall back to 1.1740 before targeting 1.1700 In the next weeks.
Key Comments:
24 hour view: “Although we expected the EUR / USD to weaken yesterday, we are of the opinion that the EUR ‘is unlikely to threaten the support at 1.1770.” We underestimated the bearish momentum as the EUR / USD fell to 1.1760 during the American session. Bearish has improved, oversold conditions suggest that a sustained decline below 1.1740 is unlikely (next support is 1.1700). Resistance is 1.1800 followed by 1.1820 ”.
Next 1-3 weeks: “Two days ago (March 24, EUR / USD at 1.1845), we highlighted that ‘the sideways trading phase is over’. We add that EUR / USD ‘is in a weak phase that could extend to 1.1770, possibly 1.1740’. Our view was not wrong even though the pace of the decline was slightly faster than expected (EUR / USD fell to 1.1760 during the American session). Bearish momentum has improved and a breakout of 1.1740 would shift focus to 1.1700. Looking ahead, the next support level to highlight below 1.1700 does not reach 1.1600. On the upside, a breakout of 1.1870 (the ‘strong resistance’ level was at 1.1900 yesterday) would indicate that the weak phase has ended”.
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