In opinion of FX Strategists at UOB Group, EUR/USD dangers additional losses so long as it trades beneath 1.2250.
24-hour view: “We highlighted yesterday that ‘additional advance in EUR is just not dominated out however a transparent break of 1.2250 is unlikely’. Whereas EUR initially moved larger, it dropped sharply after touching 1.2222 (in a single day low of 1.2138). Regardless of the comparatively speedy decline, downward momentum has barely improved and the outlook for in the present day is blended. General, EUR is prone to consolidate and commerce inside a 1.2130/1.2205 vary.”
Subsequent 1-3 weeks: “Yesterday, we highlighted that ‘a break of 1.2250 would point out that EUR is just not prepared to maneuver to 1.2080’. We added, ‘so as to rejuvenate the flagging downward momentum, EUR has to maneuver and keep beneath 1.2155 inside these 1 to 2 days or 1.2080 is unlikely to come back into the image’. Whereas the 1.2250 stage continues to be intact as EUR retreated from a excessive of 1.2222, shorter-term downward momentum has not improved by a lot. That stated, so long as 1.2250 is undamaged, there’s scope for one more push decrease however this has to occur inside these few days or downward momentum would wane shortly and this might to EUR buying and selling sideways as an alternative of heading decrease.”