In opinion of FX Strategists at UOB Group, EUR/USD’s bias has now shifted to the downside.
24-hour view: “We expected EUR to weaken yesterday but we were of the view that ‘1.2045 is unlikely to come into the picture’. The subsequent weakness exceeded our expectations as EUR plummeted to 1.2021. The rapid decline appears to be oversold but there is room for EUR to test the solid support at 1.2000 first before a more sustained recovery can be expected. Minor support is at 1.2020. On the upside, resistance is at 1.2065 followed 1.2095.”
Next 1-3 weeks: “We highlighted yesterday (17 Feb, spot at 1.2095) that ‘upward momentum has deteriorated’ and ‘a break of 1.2045 would indicate that 1.2169 is the extent of the recent EUR strength’. EUR easily cracked 1.2045 and fell to 1.2021. Shorter-term downward momentum has improved and the bias has shifted to the downside towards 1.2000. A daily closing below this solid support would open up the way for EUR to move towards the month-to-date low at 1.1950. Overall, EUR is deemed to under pressure unless it can move back above 1.2125 (‘strong resistance’ level).”