EUR/USD risks further losses below 1.1400 – UOB

FX Strategists at UOB Group noted EUR/USD risks further downside while below the 1.1400 level.

Key Quotes

24-hour view: “Our view for EUR to ‘weaken further’ amid oversold conditions was wrong as it rebounded sharply to end the day higher by 0.45% (1.1356). While upward momentum has not improved by much, there is room for the rebound to extend. That said, any advance is unlikely to threaten the strong resistance at 1.1400 (1.1380 is already quite a strong level). On the downside, a breach of 1.1315 (minor support is at 1.1335) would indicate that the current mild upward pressure has eased.”

Next 1-3 weeks: “Yesterday (15 Feb, spot at 1.1305), we highlighted that EUR is likely to weaken further and the next level to watch is at 1.1240. We did not anticipate the subsequent sharp rebound. However, our ‘strong resistance’ level at 1.1400 is still intact and there is no change in our view for now. That said, oversold shorter-term conditions suggest that it may take a while before EUR head lower again. Overall, the downside risk is intact unless EUR moves above 1.1400 (no change in ‘strong resistance’ level from yesterday).”