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FX Strategists at UOB Group noted that any bearish move in EUR/USD is expected to meet solid support at 1.2130.

Key Quotes

24-hour view: “EUR fell sharply to 1.2180 yesterday before closing on a soft note at 1.2190 (-0.49%). The rapid decline appears to be running ahead of itself but there is room for the weakness in EUR to test the major support at 1.2160. For today, the prospect for a sustained decline below this level is not high (next support is at 1.2130). Resistance is at 1.2210 followed by 1.2230.”

Next 1-3 weeks: “On Tuesday (25 May, spot at 1.2215), we held the view that EUR ‘is likely to trade between 1.2095 and 1.2245’. We added, ‘while EUR could move above 1.2245, it has to close above 1.2265 before a sustained advance can be expected’. EUR subsequently rose to 1.2266, touched 1.2262 yesterday (26 May) before dropping sharply. The sharp and rapid retreat from a major resistance level indicates that the risk for a sustained advance in EUR has dissipated. The near-term risk is tilted to the downside but at this stage, any weakness is expected to encounter solid support at 1.2130. On a shorter-term note, 1.2160 is already a strong support level. On the upside, a move back above 1.2265 would indicate that the current mild downward pressure has eased.”