EUR/USD accelerates the downside momentum – UOB

In opinion of FX Strategists at UOB Group, EUR/USD risks further declines in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the sharp decline in EUR has room to test the major support at 1.1975 first before stabilization can be expected’. EUR subsequently dipped to 1.1984 before trading sideways for the rest of the sessions. The underlying tone still appears to be a tad soft and we continue to see chance for EUR to test 1.1975. However, a sustained decline below this level is unlikely (next support at 1.1945). Resistance is at 1.2025 followed by 1.2045.”

Next 1-3 weeks: “We continue to hold the same view from two days ago (03 May, spot at 1.2030). As highlighted, ‘the near-term bias is tilted to the downside but EUR has to break the major support at 1.1975 before a more sustained (and sizeable) pullback can be expected’. Downward momentum has improved and a break of 1.1975 would suggest EUR could weaken to 1.1920. The current downward pressure is deemed to be intact as long as EUR does not move above 1.2080 (‘strong resistance’ level was previously at 1.2105).”