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In opinion of FX Strategists at UOB Group, EUR/USD could slip back to 1.1740 ahead of 1.1700 in the next weeks.

Key Quotes

24-hour view: “While we expected EUR to weaken yesterday, we were of the view that EUR ‘is unlikely to threaten the support at 1.1770’. We underestimated the downward momentum as EUR dropped to 1.1760 during NY hours. While downward momentum has improved, oversold conditions suggest a sustained decline below 1.1740 is unlikely (next support is at 1.1700). Resistance is at 1.1800 followed by 1.1820.”

Next 1-3 weeks: “Two days ago (24 Mar, spot at 1.1845), we highlighted that ‘the sideway-trading phase has ended’. We added, EUR ‘is in a weak phase that could extend to 1.1770, possibly 1.1740’. Our view was not wrong even though the pace of the decline was slightly faster than expected (EUR dropped to 1.1760 during NY hours). Downward momentum has improved and a break of 1.1740 would shift the focus to 1.1700. Looking ahead, the next support level of note below 1.1700 does not come in until 1.1600. On the upside, a break of 1.1870 (‘strong resistance’ level was at 1.1900 yesterday) would indicate that the weak phase has come to an end.”