EUR/USD downside alleviated above 1.1120 – UOB

According to the research team at UOB Group, a daily close above 1.1120 could mitigate the downside pressure on EUR/USD.

Key Quotes

“EUR dipped to a low of 1.0979 but closed well above the key level of 1.0995. As indicated yesterday, while downward momentum has improved considerably, only a daily closing below 1.0995 would indicate that a move towards 1.0905/10, 1.0820 has started”.

“This scenario still seems likely unless EUR can move back above 1.1120 from here.

“All eyes are on the ECB’s monetary policy decision, followed by Mario Draghi’s press conference. We are not expecting a change in monetary policy, but look for the overall tone of the accompanying statement and Draghi’s presser to be dovish, given the uncertain economic and political uncertainty. There is also a good chance that the ECB may adjust its bond-purchase programme to raise the allocation to the higher-yielding, more-indebted countries, due to the increasing shortage of government bonds meeting the central bank's minimum yield of -0.4%”.