EUR/USD now looks to 1.1170 – UOB

FX Strategists at UOB Group noted EUR/USD risks a depper pullback if 1.1170is cleared in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that EUR ‘could dip below 1.1200 first before a more sustained recovery can be expected’. We added, ‘the next support at 1.1170 is unlikely to come into the picture’. Our view was not wrong as EUR dropped to a low of 1.1184. That said, there is no sign that EUR is ready to recover just yet. Only a move above 1.1250 (minor resistance at 1.1230) would indicate the current soft patch has stabilized. Until then, EUR could test the 1.1170 support but the prospect for a sustained decline below this level is not high (next support is at 1.1145).”

Next 1-3 weeks: “We highlighted yesterday (18 Jun. spot at 1.1245) that ‘downward pressure has ticked up but EUR is still likely in a 1.1170/1.1380 consolidation range’. We added, EUR “has to close below 1.1170 before a deeper pull-back can be expected”. EUR closed on a relatively soft note at 1.1202 yesterday (-0.36%) and downward pressure has picked up further. From here, if EUR closes below 1.1170, it could weaken further to 1.1100. The odds for such a scenario are not high for now but would increase quickly unless EUR can move above 1.1280 within these 1 to 2 days.”