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FX Strategists at UOB Group remain bearish on EUR/USD and hinted at a potential move to 1.0770 and possibly below.

Key Quotes

24-hour view: “After trading sideways for a couple of days, EUR lurched lower and dropped to 1.0784 before ending the day on a weak note at 1.0791 (- 0.40%). The sudden pick up in momentum suggests EUR has room to weaken further to 1.0770. For today, the prospect for a break of the next support at 1.0740 is not high. Resistance is at 1.0820 followed by 1.0840.”

Next 1-3 weeks: “We highlighted on Monday (17 Feb, spot at 1.0840) that ‘the combination of waning momentum and oversold conditions suggest that a bottom may not be far away’. We added, ‘while a dip below 1.0810 would not be surprising, the next support at 1.0770 could be out of reach’. Instead of ‘dipping below 1.0810’, EUR plummeted below this level and dropped to a low of 1.0784 before ending the day on a weak note at 1.0791 (-0.40%). The sudden and rapid pick up in momentum suggests the weak phase that started earlier this month is not ready to stabilize just yet. Only a move above 1.0860 (‘strong resistance’ level previously at 1.0890) would indicate that the current weakness in EUR has run its course. Otherwise, a break of 1.0770 would open up the way for further decline towards 1.0740 (next support is at 1.0700).”