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UOB Group’s FX Strategists see EUR/USD grinding lower to 1.2010 if 1.2080 is cleared in the near-term.

Key Quotes

24-hour view: “EUR rose to 1.2144 yesterday before easing off to close on a firm note at 1.2128. Upward momentum has improved a tad and the bias is tilted to the upside. That said, any advance in EUR is expected to face stiff resistance at 1.2170. The next resistance at 1.2200 is unlikely to come under threat. On the downside, a break of 1.2105 would indicate the current mild upward pressure has eased. The next support below 1.2105 is at 1.2080.”

Next 1-3 weeks: “We highlighted on Monday (18 Jan, spot at 1.2070) that EUR is likely to weaken further and ‘the next level to focus on is at 1.2010’. EUR subsequently dropped to 1.2052 before staging a strong rebound yesterday (high of 1.2144). Shorter-term momentum has improved a tad and a break of 1.2170 (no change in ‘strong resistance’ level) would indicate that EUR is not ready to move to 1.2010 just yet. In order to rejuvenate the flagging downward momentum, EUR has to move and stay below 1.2080 within these 1 to 2 days or the odds for a move lower to 1.2010 would diminish quickly.”