EUR/USD to extend its slide on a break below the 1.1800 support – OCBC

The list of EUR-negatives is still long and a breach of the 1.1800 level cannot be ruled out, economists at OCBC Bank appraise.

See: EUR/USD to plummet towards Fibonacci marker at 1.1695 – DBS Bank

Key quotes

“Bounces in the EUR/USD lack altitude, and the technical picture remains negative for the pair.”

“EZ preliminary PMIs outperformed across the board, while the corresponding US prints were softer than expected. This does not alter the divergent macro outlook between US and EZ, especially with EZ dealing with a third wave pandemic/lockdowns. Meanwhile, Fed rhetoric on US growth is noticeably more confident even compared to Jan 2021, and this should flow through to market perceptions. This divergence leaves us to be negative on the EUR/USD.”

“Overall, the 200-day MA (1.1861) should cap bounces for now, against immediate support at 1.1800.” 

“A breach of that leaves the multi-session target at 1.1690/00, then 1.1610/30 (Sep/Nov 2020 lows).”