FX Strategists at UOB Group noted that further downside in EUR/USD is likely while below 1.1360 for the time being.

Key Quotes

24-hour view: “We expected EUR to ‘consolidate and trade between 1.1290 and 1.1360’ yesterday. EUR subsequently rose to 1.1358, dropped to 1.1299 before dropping below 1.1280 during early Asian hours. Downward momentum has improved and EUR could weaken further. That said, the next major support at 1.1240 is unlikely to come into the picture (there is a minor support at 1.1260). On the upside, a breach of 1.1330 (minor resistance is at 1.1315) would indicate that the downside risk has dissipated.”

Next 1-3 weeks: “Yesterday (23 Feb, spot at 1.1325), we highlighted that while downward momentum has waned somewhat, there is still chance for EUR to drop to 1.1280. Our view was not wrong as EUR dipped below 1.1280 during early Asian hours. Downward momentum has improved and the chance for the weakness in EUR to extend to the next major support at 1.1240 has increased. Only a break of 1.1360 (‘strong resistance’ level was at 1.1375yesterday) would indicate that the downside risk that started more than a week ago has dissipated.”