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FX Strategists at UOB Group noted EUR/USD now faces downside bias and targets the 1.1180 zone.

Key Quotes

24-hour view: “Strong US jobs data sent EUR plummeting to a low of 1.1205. The sharp decline is running too fast, too soon and while a test of 1.1200 would not be surprising, the mid-June low near 1.1180 is not expected to come into the picture for today. On the upside, only a move above 1.1260 would indicate that the current weakness has stabilized (minor resistance is at 1.1245)”.

Next 1-3 weeks: “We have held the same view last Tuesday (02 Jul, spot at 1.1285) wherein EUR “is in a sideway-trading phase” but we added, “the soft underlying tone suggest the immediate bias is tilted to the downside”. However, the expected ‘solid support’ at 1.1220 (bottom of the expected 1.1220/1.1340 range) did not materialize as EUR crashed to a low of 1.1205 last Friday (05 Jul). Downward momentum has improved even though not by as much as we would like. From here, EUR is expected to trade with a ‘downside bias’ towards the midJune low near 1.1180. A dip below this level is not ruled out but at this stage, the risk for a break of the year’s low at 1.1106 is not high. On the upside, only a move above the strong resistance at 1.1290 would indicate the current downward pressure has eased”.