UOB Group’s FX Strategists remain bearish on EUR/USD in the near-term, expecting a potential move to 1.1800.
24-hour view: “We highlighted yesterday ‘further weakness is not ruled out but severely oversold conditions suggest EUR is unlikely able to maintain a foothold below the major support at 1.1800’. However, 1.1800 was not threatened as EUR rebounded strongly to an overnight high of 1.1909 (low has been 1.1834). There is room for the rebound to extend but any advance is likely limited to a test of 1.1940. The strong resistance at 1.1980 is not expected to come into the picture. Support is at 1.1860 followed by 1.1835.”
Next 1-3 weeks: “We have held a negative view in EUR since the start of the month. In our latest narrative from yesterday (09 Mar, spot at 1.1850), we highlighted that ‘we continue to expect EUR to move lower to 1.1800’. EUR subsequently dropped to 1.1834 before staging a robust rebound. Shorter-term momentum is beginning to wane but the overall negative phase is intact unless there is a break of 1.1980 (no change in ‘strong resistance’ level). In view of the oversold conditions, EUR could not afford to dither or the odds for a move to 1.1800 would diminish quickly.”