EUR/USD risks extra losses below 1.2050 – UOB

Pablo Piovano FXStreet

FX Strategists at UOB Group noted EUR/USD faces a potential deeper pullback below the 1.2050 level.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the bias remains on the downside even though 1.2050 is a solid support and may not be easy to crack’. However, EUR recovered quickly after touching a low of 1.2079 (high has been 1.2141). Downward pressure has eased and for today, EUR is likely to trade sideways, expected to be within a 1.2085/1.2150 range.”

Next 1-3 weeks: “We have held the same view since last Friday (22 Jan, spot at 1.2165) where we expect EUR to ‘trade between 1.2080 and 1.2250 for a period of time’. Since then, EUR has traded mostly sideways but it dropped sharply to 1.2056 yesterday. Shorter-term downward momentum is improving and the risk is shifting to the downside. That said, EUR has to close below 1.2050 before a sustained decline can be expected. The odds for such a move are quite high unless EUR moves above 1.2180 within these few days. Looking ahead, the next support below 1.2050 is at 1.2000.”

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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