In opinion of FX Strategists at UOB Group, EUR/USD risks a deeper retracement if 1.1080 is breached in the next weeks.

Key Quotes

24-hour view: “Our view for EUR to trade sideways yesterday was incorrect as it plummeted to a low of 1.1088 before closing at 1.1125 (-0.83%). Further EUR weakness is not ruled out but a sustained decline below the major support at 1.1080 appears unlikely (next support is at 1.1050). On the upside, a breach of 1.1165 (minor resistance is at 1.1145) would indicate that the current weakness has stabilized.”

Next 1-3 weeks: “We have held a negative view in EUR for more than 2 weeks now. In our latest narrative from Friday (25 Feb, spot at 1.1205), we highlighted that ‘further EUR weakness is not ruled out but EUR could trade above 1.1105 for a couple of days first’. Yesterday (01 Mar), EUR dropped below 1.1105 before rebounding after touching a low of 1.1088. The price actions suggests EUR could continue to head lower. A clear break of 1.1080 could potentially open up the way for a decline to 1.1000 (there is a minor support at 1.1050). Overall, only a break of 1.1235 (‘strong resistance’ level was at 1.1290 yesterday) would indicate that the weak phase has run its course.”