EUR/USD faces a probable move to the 1.0880 region – UOB
FX Strategists at UOB Group still expect EUR/USD to drift lower to the 1.0880 region in the near-term.
24-hour view: “We highlighted yesterday that ‘there is no sign of stabilization just yet’ and expected EUR to ‘edge lower towards 1.0910’. EUR dropped to an overnight low of 1.0906 before settling on a weak note at 1.0909 (-0.31%). While the decline over the past several days is severely over-extended, EUR does not appear to be ready to recover yet. From here, last year’s low at 1.0877 is acting as an ‘attraction’ even though this level may not come into the picture for today. On the upside, only a move above 1.0950 (minor resistance is at 1.0930) would indicate the current weakness has stabilized.”
Next 1-3 weeks: “EUR extended its loss as it dropped to a low of 1.0906 yesterday. The price action was not surprising. We first detected the ‘pick up in downward momentum’ last Thursday (06 Feb, spot at 1.1000) and we ‘upgraded’ our negative view for three consecutive days in a row. For now, our narrative from yesterday (10 Feb, spot at 1.0945) wherein “solid downward momentum suggests the 2019 low of 1.0877 is within reach” still stands. Looking forward, a breach of this major support could potentially lead to further rapid decline as the next support of note is not until 1.0810. Resistance is at 1.0950 but only a move above 1.0980 (‘strong resistance’ level was at 1.1010 yesterday) would indicate the current weak phase has stabilized.”