EUR/USD now targets 1.1915 short term – UOB

FX Strategists at UOB Group stay bearish on spot, expecting a test of 1.1915 in the near term.

Key Quotes

24-hour view: “While the sharp and rapid decline in EUR appears to be running too fast, too soon, further weakness still seems likely. However, in view of the oversold conditions, the pace of any further down-move would likely be slower. From here, barring a move back above 1.2055 (minor resistance is at 1.2020), we expect EUR to edge lower towards 1.1960 (with lower odds for further extension to 1.1930)”.

Next 1-3 weeks: “We first highlighted that the pressure for EUR has shifted to the downside more than 2 weeks ago and since then, have steadily ‘downgraded’ the outlook for EUR. In our latest update on Friday, we indicated that the outlook for EUR would “shift to bearish if NY close is below 1.2090”. This condition was met on Monday (30 Apr) when EUR closed at 1.2077 in NY. As mentioned on Friday, a clear break of 1.2090 would suggest that the 1.2555 high seen in February could be a significant mid to long-term top. In the meanwhile, EUR extended its decline yesterday and is already approaching the ‘immediate target’ at 1.1960 (overnight low of 1.1980). In view the strong and impulsive decline, it is too soon to expect EUR to bottom out. From here, a break below 1.1960 would open up the way for a move to the year-to-date low at 1.1915. Resistance is at 1.2055 but only a break above 1.2090 (‘stop-loss’ level) would indicate that a short-term low is in place”.