FX Strategists at UOB Group noted that the EUR/USD faces a possible drop to the 1.1240 region in the coming weeks.
24 hour outlook: “We were expecting the EUR to weaken yesterday, but were of the opinion that the big support at 1.1300 was unlikely to come into the picture. The expected weakness exceeded our expectations, as the euro fell to 1.1278 during the New York session. As of here, the single currency is likely to weaken further, but oversold conditions suggest any decline could be capped at 1.1270. The next big support at 1.1240 is unlikely to be threatened. On the upside, a break of 1.1350 (minor resistance is at 1.1330) would indicate that the current downward pressure has eased.”
Next 1-3 weeks: “Yesterday (Feb 14, pair at 1.1365), we highlighted that the downside pressure had increased slightly and we expected the euro to drop and test 1.1300. We did not anticipate how quickly the EUR fell below 1.1300 (low of 1.1278) Downside momentum has improved and the common currency is likely to weaken further. next level to watch is at 1.1240. Overall, the downside pressure is intact as long as the EUR doesn’t move above 1.1400 (‘strong resistance’ level was 1.1440 yesterday).”
Source: Fx Street
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