According to FX Strategists at UOB Group, there is still scope for EUR/USD to grind lower to the 1.0770 region ahead of 1.0740.
Key Quotes
24-hour view: “EUR edged below the bottom of our expected sideway-trading range of 1.0785/1.0830 (low of 1.0775) before settling at 1.0783 (- 0.19%). While it is too early to expect a bottom, the combination of waning momentum and oversold conditions suggest EUR is likely to struggle to extend its decline. From here, there is chance for EUR to dip below the major 1.0770 support but a sustained drop below this level is not expected (next support is at 1.0740). Resistance is at 1.0805 followed by 1.0820.”
Next 1-3 weeks: “EUR registered the thirteen straight days of ‘lower low’ yesterday (albeit marginally) as it touched 1.0775. Our latest narrative from Wednesday (19 Feb, spot at 1.0795) still stands. As highlighted, the weak phase that started earlier this month has not stabilized. That said, downward momentum appears to be struggling and EUR has to break the major 1.0770 support before a move to 1.0740 can be expected. On the upside, the ‘strong resistance’ level has moved lower to 1.0845 from 1.0860. A breach of the ‘strong resistance’ would indicate the current weakness in EUR has run its course.”
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