FX Strategists at UOB Group noted EUR/USD could extend the downside to the 1.1280 region in the next weeks.

Key Quotes

24-hour view: “Yesterday, we held the view that ‘there is room for EUR to test the strong support at 1.1300’. However, it rebounded to 1.1390, dropped back down to 1.1305 before dipping below 1.1300 after NY close. Downward momentum is building rapidly and EUR could drop below 1.1280. The next support at 1.1240 is likely out of reach. Resistance is at 1.1325 followed by 1.1345.”

Next 1-3 weeks: “We highlighted yesterday (21 Feb, spot at 1.1315) that downward momentum is beginning to build again and EUR could head lower to 1.1280. We added, in order to maintain the build-up in momentum, EUR has to stay below the ‘strong resistance’ level at 1.1400. EUR subsequently rebounded to 1.1390 before dropping back down to close at 1.1310 (-0.10%). There is no change in our view and a clear break of 1.1280 would shift the focus to 1.1240. On the upside, a breach of the 1.1375 (‘strong resistance’ level was at 1.1400) would indicate that the overall downside risk that started more than a week ago has come to an end.”