The currency strategists of UOB Group noted that the EUR / USD still faces a probable drop to the 1.2080 region In the next weeks.
24 hour perspective: “We expected the EUR to trade within a 1.2130 / 1.2205 range yesterday. However, it fell to 1.2109 before recovering quickly and ended the day little changed at 1.2156 (-0.01%). Momentum to the downside has improved somewhat and the bias is leaning south. Having said that, any weakness is likely to be limited to a retest of the 1.2110 level. The next support at 1.2080 is unlikely to be threatened. On the upside, a breakout of 1.2190 would indicate that the current slight downward pressure has eased (minor resistance is at 1.2170) ”.
Next 1-3 weeks: “We have had a negative view on EUR since the beginning of the week. However, the euro has not been able to advance much lower. Short-term momentum is building again and there is still chances of it moving towards solid support at 1.2080. Barring a sudden increase in momentum, the prospect of a sustained decline below this level is not high (next support is at 1.2050). On the upside, a break out of 1.2220 (previously ‘strong resistance’ level at 1.2250) would indicate that the current moderate area has stabilized. “
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