According to FX Strategists at UOB Group, EUR/USD remains under pressure and keeps targeting the 1.0805 level in the next weeks.
Key Quotes
24-hour view: “Yesterday, we highlighted that ‘deeply oversold conditions suggest EUR is unlikely to weaken further’ and we expected EUR to consolidate between 1.0805 and 1.0925. EUR subsequently traded sideways but it popped to a high of 1.0958 during NY session before dropping back down quickly. We continue to view the current price actions as part of a consolidation and expect EUR to trade within a range of 1.0860/1.0965 for today.”
Next 1-3 weeks: “Our latest narrative was from two days ago (07 Mar, spot at 1.0875) where EUR is still weak and the next level to focus on is at the long-term support at 1.0805. EUR subsequently dropped to 1.0804 before rebounding. While we still see risk of a break of 1.0805, EUR could not afford to dither as a consolidation at these oversold levels would diminish the odds for a break of 1.0805. All in, only a breach of 1.1000 (no change in ‘strong resistance’ level) would indicate that the EUR weakness that started more than 2 weeks ago (see annotations in the chart below) has run its course.”
