EUR/USD still focused on 1.2153 – UOB

FX Strategists at UOB Group suggested the pair’s attention should remain on the mid-1.2100s in the near term.

Key Quotes

24-hour view: “We expected further EUR weakness yesterday but were of the view that the major 1.2155 level is likely out of reach. In line with expectation, EUR dipped to the minor support indicated at 1.2180 (low has been 1.2180) before rebounding. A short-term bottom is likely in place and while the recovery appears to have scope to extend above the overnight high of 1.2245, any advance is expected to struggle to move above 1.2270 (there is another rather strong resistance at 1.2300). Support is at 1.2205 followed by the 1.2180 low”.

Next 1-3 weeks: “We highlighted yesterday (23 Apr, 1.2280) that the “pressure has shifted to the downside” and expected “further weakness to 1.2212”. However, we did not exactly expect 1.2212 to be taken out within such a short period of time (overnight low of 1.2196). From here, the focus has shifted to last month’s 1.2153 low and based on the vastly improved downward momentum, the odds for a break of this level have increased considerably. A clear break of this level would suggest that EUR is ready for much deeper down-move in the weeks ahead. In the meanwhile, only a break back above 1.2300 (‘key resistance’ was at 1.2355 yesterday) would indicate that a short-term low is in place”.