EUR/USD: Downward bias loses momentum – UOB

In opinion of FX Strategists at UOB Group, further decline in EUR/USD now seems to be running out of steam.

Key Quotes

24-hour view: “We highlighted yesterday that ‘upward momentum still appears to be lackluster and EUR is unlikely to strengthen much further’ and we expected EUR to ‘trade sideways within a range of 1.1340/1.1400’. EUR subsequently traded between within a lower range than expected (1.1321/1.1385). Flattish momentum suggest EUR could continue to trade sideways for today, expected to be between 1.1330 and 1.1395.”

Next 1-3 weeks: “Two days ago (16 Feb, spot at 1.1355), we highlighted that oversold shorter-term conditions suggest that it may take a while before EUR head lower again. EUR traded sideways the past couple of days and while there is no change in our view, downward momentum has waned and the odds for further EUR weakness have diminished. In order to rejuvenate the flagging momentum, EUR has to move and stay below 1.1310 within these 1 or 2 days or a break of 1.1400 (no change in ‘strong resistance’ level from yesterday) would indicate that the downward pressure that started late last week has dissipated.”