In opinion of FX Strategists at UOB Group, EUR/USD now shifted its focus to the 1.2000 level in the next weeks.
Key Quotes
24-hour view: “Our expectation for EUR to ‘test the solid support at 1.2000’ was incorrect as it rebounded strongly to an overnight high of 1.2094. The recovery could edge higher but is unlikely to break the strong resistance at 1.2125 (next resistance is 1.2155). On the downside, a break of 1.2060 would indicate that the current upward pressure has eased.”
Next 1-3 weeks: “We highlighted yesterday (17 Feb, spot at 1.2095) that ‘upward momentum has deteriorated’ and ‘a break of 1.2045 would indicate that 1.2169 is the extent of the recent EUR strength’. EUR easily cracked 1.2045 and fell to 1.2021. Shorter-term downward momentum has improved and the bias has shifted to the downside towards 1.2000. A daily closing below this solid support would open up the way for EUR to move towards the month-to-date low at 1.1950. Overall, EUR is deemed to under pressure unless it can move back above 1.2125 (‘strong resistance’ level).”
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