EUR/USD faces a possible drop to the region below 1.1300 in the coming weeks, currency strategists at UOB Group noted.
24hr Outlook : “Our expectations for the USD to trade between 1.1310 and 1.1360 were wrong as the Euro fell to 1.1289 before bouncing. Despite the bounce, the underlying tone is soft and we see room for the Euro to test the main support at 1.1285 . For today, the chances of the EUR breaking this important support are not high. Resistance is at 1.1340 followed by 1.1360”.
Next 1-3 weeks – “Last Thursday (Jan 20, pair at 1.1340), we highlighted that there was a slight downward bias in the Euro, but any weakness would likely be limited to a test of 1.1285. Yesterday (Jan 24), the EUR fell to 1.1289 before rebounding. Despite the bounce, the downside bias remains intact as long as the single currency does not break above 1.1385 (no change in “strong resistance” level). Looking ahead, if there is a clear break of 1.1285, the next support level to watch is 1.1240 .”