In view of FX Strategists at UOB Group, EUR/USD is expected to keep the negative view s long as it trades below 1.1175.
24-hour view: “Our expectation of a sideways pattern was incorrect as EUR rallied to a 1-week high of 1.1163. Within upside momentum has picked up, further rallies in EUR from here should take on a measured pace with the next roadblock expected at 1.1170. Even if that is taken, 1.1200 will be a hard level to crack at least for today. On the downside, look for supports at 1.1135 and 1.1120”.
Next 1-3 weeks: “Downward momentum has improved further and the risk for EUR is still on the downside. However, the mid-Dec low near 1.1065 is a major support and at this stage, the prospect for a sustained decline below this level is not high. Overall, EUR is expected to remain on the back foot unless it can move above 1.1175 (‘key resistance’ level was at 1.1195 yesterday). Looking ahead, even if EUR were to break below 1.1065, any further weakness is expected to encounter solid support at 1.1030 followed by 1.1000. In other words, we do not consider the current weakness in EUR as part of a major downtrend.”
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