EUR/USD odds for a test of 1.1715 appears diminished – UOB

FX Strategists at UOB Group remain bearish on the pair, although a test of 1.1715 seems to have lost some traction.

Key Quotes

24-hour view: “EUR hit a fresh a year’s low of 1.1821 before rebounding quickly. Despite the bounce, the undertone is still weak and the next major support at 1.1800 could be tested from here. For today, we do not anticipate a clear break below this level. Resistance is at 1.1880 but only a move back above 1.1910 would indicate that the current weakness has stabilized”.

Next 1-3 weeks: “In the latest update on Tuesday (08 May, spot at 1.1925), we left off with the view that EUR has to “stay below 1.1910/15 or the risk of a short-term low would increase quickly”. EUR closed below 1.1910/15 by end of Tuesday and subsequently extended its decline to hit a low of 1.1821 yesterday. The bearish phase that started about 2 weeks ago is still intact and the next level to focus on is at 1.1800. Despite severely oversold conditions, a dip below this level would not be surprising but the Dec 2017 low of 1.1715 could be out of reach this time round. Resistance is at 1.1910 but only a break of 1.1960 (‘stop-loss’ level previously at 1.2050) would indicate that the current bearish phase has ended”.