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FX Strategists at UOB Group noted EUR/USD could have carved a short-term bottom in the 1.0990 region.

Key Quotes

24-hour view: “While we indicated last Friday ‘the underlying tone has firmed somewhat’, we did not anticipate the sudden surge in EUR that hit a high of 1.1096. The subsequent strong daily closing in NY (1.1093) suggests further EUR strength from here. EUR could move above 1.1115 but the next resistance of note at 1.1150 is likely out of reach. On the downside, 1.1050 is expected to be strong enough to hold any intraday pull-back (minor support is at 1.1070).”

Next 1-3 weeks: “We cautioned last Friday (31 Jan, spot at 1.1030) that the weak phase that started earlier in January “appears to be close to ending”. While our view was correct, the subsequent strong and rapid surge in EUR that resulted in a solid gain of +0.57% (largest 1-day gain in more than a month) was not exactly expected. The price action suggests that EUR has found a short-term bottom at 1.0990 last Wednesday (29 Jan). The current rebound has scope to extend but at this stage any gain is expected to encounter solid resistance at 1.1180 (on a shorter-term note, 1.1150 is a strong level). On the downside, last Friday’s low near 1.1015 is expected to be strong enough to hold any pullback, at least for the next one week or so.”