FX Strategists at UOB Group noted EUR/USD could slip back to the 1.1920 region if 1.1975 is cleared in the next weeks.
24-hour view: “Our expectation for EUR to ‘trade sideways’ was wrong as it plummeted to 1.1997 before closing on a soft note at 1.2013 (-0.40%). While oversold, the sharp decline in EUR has room to test the major support at 1.1975 first before stabilization can be expected. Resistance is at 1.2030 followed by 1.2050.”
Next 1-3 weeks: “We continue to hold the same view from two days ago (03 May, spot at 1.2030). As highlighted, ‘the near-term bias is tilted to the downside but EUR has to break the major support at 1.1975 before a more sustained (and sizeable) pullback can be expected’. Downward momentum has improved and a break of 1.1975 would suggest EUR could weaken to 1.1920. The current downward pressure is deemed to be intact as long as EUR does not move above 1.2080 (‘strong resistance’ level was previously at 1.2105).”