UOB Group currency strategists note that the EUR / USD could return to the 1.1800 zone In the next weeks.
Key Comments:
24 hour view: “Although we expected EUR / USD to weaken yesterday, we are of the opinion that ‘it is unlikely to approach the next support at 1.1850.’ We underestimated the bearish momentum as EUR / USD plunged to a low of 1.1842. A higher is not ruled out. weakness, but severe oversold conditions suggest that EUR / USD is unlikely to sustain momentum below main support at 1.1800. On the upside, a breakout of 1.1900 (minor resistance is at 1.1975) would indicate that the current weakness has stabilized ”.
Next 1-3 weeks: “We have had a negative view on EUR / USD since the beginning of the month. As EUR / USD fell as expected, in our latest narrative yesterday (March 8, EUR / USD at 1.1915), we highlighted that ‘the outlook for EUR / USD remains negative’ and ‘further losses to 1.1800 would not be surprising ‘. While our opinion was not wrong, we do not anticipate the subsequent quick sell-off (EUR / USD plunged to 1.1842 during the American session). All in all, there is no change in our opinion as we continue to expect the EUR / USD to move lower to 1.1800. Looking ahead, a clear breakout of 1.1800 would shift focus to 1.1740. Only a breakout of 1.1980 (the ‘strong resistance’ level was at 1.2020 yesterday) would indicate that the current negative phase in EUR / USD is over. “
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