FX Strategists at UOB Group noted the selling pressure around EUR/USD should end on a close above 1.1200
Key Quotes
24-hour view: “We expected EUR to weaken yesterday but we were of the view that ‘a sustained decline below the major support at 1.1080 appears unlikely’. We highlighted that ‘the next support is at 1.1050’. EUR subsequently dropped to 1.1056 before rebounding to close largely unchanged at 1.1121 (-0.04%). Downward pressure has eased and further EUR weakness is unlikely. For today, EUR is more likely to trade sideways between 1.1070 and 1.1165.”
Next 1-3 weeks: “Yesterday (02 Mar, spot at 1.1130), we expected EUR to continue to head lower. We highlighted that ‘a clear break of 1.1080 could potentially open up the way for a decline to 1.1000 (there is a minor support at 1.1050)’. EUR subsequently dropped to 1.1056 before rebounding. Downward momentum has waned somewhat and EUR could not afford to dither at these oversold levels or the chance for a move to 1.1000 would diminish quickly. Overall, only a breach of 1.1200 (‘strong resistance’ level was at 1.1235 yesterday) would indicate that the weak phase that started more than 2 weeks ago has run its course.”