In opinion of FX Strategists at UOB Group, EUR/USD’s momentum could possibly be shifting to the draw back within the short-term.
24-hour view: “Our expectation for the ‘rebound in EUR to increase’ was incorrect because it plummeted to 1.2056 earlier than snapping again as much as finish the day at 1.2108 (-0.43%). Regardless of the bounce, the bias stays on the draw back although 1.2050 is a strong help and will not be simple to crack. On the upside, a break of 1.2155 would point out that the present draw back threat has dissipated (minor resistance is at 1.2135).”
Subsequent 1-3 weeks: “We’ve held the identical view since final Friday (22 Jan, spot at 1.2165) the place we anticipate EUR to ‘commerce between 1.2080 and 1.2250 for a time period’. Since then, EUR has traded largely sideways nevertheless it dropped sharply to 1.2056 yesterday. Shorter-term downward momentum is enhancing and the danger is shifting to the draw back. That mentioned, EUR has to shut under 1.2050 earlier than a sustained decline may be anticipated. The percentages for such a transfer are fairly excessive until EUR strikes above 1.2180 inside these few days. Wanting forward, the following help under 1.2050 is at 1.2000.”