EUR/USD focus now shifted to 1.2153 – UOB

In opinion of FX Strategists at UOB Group, spot remains neutral and is now eyeing a test of the mid-1.2100s.

Key Quotes

24-hour view: “Expectation for sideways trading yesterday was incorrect as EUR extended its decline to hit a low of 1.2196. While further EUR weakness seems likely in the days ahead, the sharp and rapid decline appears to be running ahead of itself. That said, a move below the 1.2196 low would not be surprising but the major 1.2155 support (low in March) is likely out of reach (minor support is at 1.2180). On the upside, we expect 1.2270 to be strong enough to cap any intraday recovery (minor resistance is at 1.2240)”.

Next 1-3 weeks: “We highlighted yesterday (23 Apr, 1.2280) that the “pressure has shifted to the downside” and expected “further weakness to 1.2212”. However, we did not exactly expect 1.2212 to be taken out within such a short period of time (overnight low of 1.2196). From here, the focus has shifted to last month’s 1.2153 low and based on the vastly improved downward momentum, the odds for a break of this level have increased considerably. A clear break of this level would suggest that EUR is ready for much deeper down-move in the weeks ahead. In the meanwhile, only a break back above 1.2300 (‘key resistance’ was at 1.2355 yesterday) would indicate that a short-term low is in place”.