EUR/USD now shifts the focus to 1.2250 – UOB

FX Strategists at UOB Group suggested the next level of note in EUR/USD is now at 1.2250.

Key Quotes

24-hour view: “Yesterday, we held the view that ‘the rapid decline is oversold but there is room for EUR to test 1.2125 first before stabilization can be expected’. However, EUR did not quite test 1.2125 as it rebounded strongly from 1.2135 to an overnight high of 1.2209. The rapid rise appears to be running ahead of itself but further advance is not ruled out. That said, a clear break of the ‘strong resistance’ at 1.2250 is unlikely (next resistance is at 1.2280). Support is at 1.2180 followed by 1.2155.”

Next 1-3 weeks: “We highlighted yesterday (12 Jan, spot at 1.2185) that ‘chance for EUR to move to 1.2080 has increased’. We added, ‘the current downward pressure is deemed as intact as long as it does not move above the ‘strong resistance’ level at 1.2250. While the ‘strong resistance’ level is still intact, the relatively strong bounce of +0.48% (1.2207) has dented the downward momentum. A break of 1.2250 would not be surprising and would indicate that EUR is not ready to move to 1.2080. In order to rejuvenate the flagging downward momentum, EUR has to move and stay below 1.2155 within these 1 to 2 days or 1.2080 is unlikely to come into the picture.”