FX Strategists at UOB Group famous EUR/USD faces prospects of additional decline within the subsequent weeks.
24-hour view: “Whereas the sharp in a single day plunge in EUR seems to be operating forward of itself, the decline has not stabilized. In different phrases, EUR is more likely to weaken additional. In view of the deeply oversold situations, the help at 1.1920 is unlikely to return into the image (minor help at 1.1955). Resistance is at 1.2020 adopted by 1.2050.”
Subsequent 1-3 weeks: “On Monday (14 Jun, spot at 1.2110), we highlighted that enchancment in downward momentum may result in EUR to ‘commerce with a downward bias in the direction of 1.2050’. After EUR traded in a quiet method for a few days, we famous yesterday (16 Jun) that ‘whereas momentum is starting to wane, there may be nonetheless likelihood for EUR to say no to 1.2050’. Whereas our view for a weaker EUR was not mistaken, we didn’t anticipate the outsized decline of -1.07% yesterday (the decline is the biggest 1-day drop since March final 12 months). Regardless of being oversold, EUR is more likely to weaken additional although it’s left to be seen if it might break the main long-term help at 1.1920. All in, the danger stays on the draw back until EUR can transfer above 1.2080 (‘sturdy resistance’ stage was at 1.2180 yesterday).”