The currency strategists of UOB Group remain bearish on EUR / USD in the short term, expecting a potential move to 1.1800.
24 hour perspective: “We highlighted yesterday that further weakness was not ruled out, but severe oversold conditions suggested that it was unlikely that the EUR could sustain a foothold below the main support at 1.1800. However, 1.1800 was not threatened as the EUR rallied strongly to a high of 1.1909 (the low was 1.1834). There is room for the rebound to extend, but any advance is likely to be limited to a test of 1.1940. Strong resistance at 1.1980 is not expected to enter the picture. The support is at 1.1860 followed by 1.1835 “.
Next 1-3 weeks: “We have had a negative view on EUR since the beginning of the month. In our last narrative yesterday (March 9, pair at 1.1850), we highlighted that we were still expecting the euro to move lower to 1.1800. Subsequently, the EUR fell to 1.1834 before making a strong rebound. Short-term momentum is beginning to wane, but the overall negative phase is intact unless there is a 1.1980 breakout (no change in “strong resistance” level). In view of the oversold conditions, the euro could not afford to waver or the odds of a move to 1.1800 would diminish rapidly “
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