EUR/USD looks fragile and targets 1.0810 – UOB
FX Strategists at UOB Group now see a potential drop in EUR/USD to the 1.0810 area in the next weeks.
24-hour view: “Our expectation for a ‘temporary bottom’ yesterday was incorrect as EUR plunged to an overnight low of 1.0863. The rapid and strong pick up in momentum suggests further EUR weakness is likely. From here, barring a move above 1.0905, EUR is expected to decline further to 1.0840. For today, the next major support at 1.0810 is likely out of reach.”
Next 1-3 weeks: “We have held a negative view on EUR since last Thursday (06 Feb) when it was trading at 1.1000. The subsequent decline has been relatively sharp and rapid and our latest narrative was from Tuesday (11 Feb, spot at 1.0910) wherein a ‘breach of major 1.0877 support could potentially lead to further rapid decline as next support of note is not until 1.0810’. EUR cracked 1.0877 yesterday (12 Feb) and the focus is at 1.0810 now. Overall, there is no early sign that the current weak phase in EUR is stabilizing. Only a move above 1.0950 (‘strong resistance’ level previously at 1.0980) would indicate the weakness in EUR has run its course.”