EUR/USD still bearish, further retracements unlikely – UOB

The pair’s stance remains bearish in the near term although the probability of further downside is now unlikely, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “The sudden and sharp rise in EUR that hit a high of 1.1946 was unexpected. While the up-move appears to be running ahead of itself, a test of the strong 1.1960 resistance would not be surprising. At this stage, a clear break of this level seems unlikely. Support is at 1.1875 followed by 1.1845”.

Next 1-3 weeks: “We highlighted yesterday that “the next level to focus on is at 1.1800” but added that the “Dec 2017 low of 1.1715 could be out of reach”. The subsequent strong and sharp rebound that hit a high of 1.1946 was not expected (note that the +0.53% gain registered yesterday was the largest 1-day advance since late March). While the ‘stop-loss’ for our bearish view at 1.1960 is still intact, the price action suggests that the odds for further weakness have diminished. In order to ‘revive’ the rapidly waning downward momentum, EUR has to move and stay below 1.1845 within these 1 to 2 days or a break of the ‘stop-loss’ at 1.1960 would not surprise at all”.