EUR/USD: Short-term bias shifts to the downside – UOB

FXStreet reports that in the opinion of FX Strategists at UOB Group, EUR/USD risks a deeper pullback below the 1.1975 level in the next weeks.

Next 1-3 weeks: “In our latest narrative from last Thursday (29 Apr, spot at 1.2135), we indicated that ‘the positive phase in EUR is still intact but in view of the overbought conditions, EUR may find it hard to break the major resistance at 1.2185’. However, we did not quite expect the sudden sharp drop on Friday that took out our ‘strong support’ level at 1.2050 (low of 1.2015). The break of the ‘strong support’ indicates that the positive phase that started in early April has run its course. From here, the near-term bias is tilted to the downside but EUR has to break the major support at 1.1975 before a more sustained (and sizeable) pullback can be expected. At this stage, the prospect for a break of 1.1975 is not high but it would increase unless EUR moves above 1.2105 within these few days.”