EUR/USD faces downside risks near-term – UOB

FX Strategists at UOB Group noted EUR/USD risks further downside in the next weeks.

Key Quotes

24-hour view: “Yesterday, we held the view that ‘there is room for EUR to dip below 1.2060 but any weakness is viewed as part of a 1.2050/1.2130 range’. The subsequent decline exceeded our expectation as EUR dropped to 1.2026. Downward momentum has improved, albeit not by much. There is scope for EUR to dip below 1.2020 first before a recovery can be expected. For today, the next support at 1.1985 is unlikely to come under threat. On the upside, a break of 1.2090 (minor resistance is at 1.2070) would indicate the current downward pressure has eased.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (01 Mar, spot at 1.2085). As highlighted, ‘downside risk has increased and EUR could drop to 1.2020’. EUR subsequently dropped to 1.2026 and the risk is still on the downside. A break of 1.2020 would shift the focus to 1.1985. The current downside risk for EUR is deemed as intact as long as 1.2135 (‘strong resistance’ level was at 1.2170 yesterday) is not breached.”