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FX Strategists at UOB Group noted EUR/USD could slip back and re-test the 1.09 area in the near-term.

Key Quotes

24-hour view: “We did not expect the sudden sharp plunge in EUR that sent it to an overnight low of 1.0953. While oversold, the decline is not showing sign of stabilization just yet. From here, EUR could dip below the overnight low but the next support at 1.0900 is likely out of reach. Resistance is at 1.1050 but only a move back above 1.1100 would indicate the current weakness has stabilized.”

Next 1-3 weeks: “While we highlighted last Friday (13 Mar, spot at 1.1170) that ‘a short-term top is in place’, we expected EUR to ‘trade in a choppy manner and within a broad range’. EUR subsequently traded sideways for a couple of days before lurching lower yesterday (17 Mar) and cracked the bottom of the expected range at 1.0980 (low of 1.0953). The rapid pick-up in momentum suggests EUR could decline further from here. That said, it is too early to tell if the current weakness could move to last month’s low at 1.0775. Meanwhile, EUR is expected to trade on the back foot unless it can move above the ‘strong resistance’ level of 1.1180. On the downside, a test of the 1.0900 support would not be surprising.”