In opinion of FX Strategists at UOB Group, EUR/USD could be headed towards the 1.1240 level in the next weeks.

Key Quotes

24-hour view: “Yesterday, we held the view that EUR could ‘test the major support at 1.1285 but the odds of EUR breaking this major support are not high’. However, EUR breached 1.1285 and dropped to 1.1261 before rebounding. The rebound amid lackluster downward momentum indicates that EUR is unlikely to weaken further. For today, EUR is more likely to trade sideways between 1.1280 and 1.1335.”

Next 1-3 weeks: “We have the same view since last Thursday (20 Jan, spot at 1.1340) where there is a slight downward bias in EUR but any weakness is likely limited to a test of 1.1285. Yesterday (25 Jan), we highlighted, that ‘Looking ahead, if there is a clear break of 1.1285, the next support level to watch is at 1.1240’. EUR dropped below 1.1285 during London session before rebounding from 1.1261. Despite the breach of 1.1285, downward momentum has not improved by much. That said, the downward bias is still intact and EUR could edge lower to 1.1240. On the upside, a breach of 1.1365 (‘strong resistance’ level was at 1.1385 yesterday) would indicate that the downward bias has eased.”