EUR/USD focused on 1.2153 near term – UOB

A break below 1.2153 should allow for further weakness in the near term, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Instead of extending its recovery (as expected yesterday), EUR slumped to hit a low of 1.2158, holding just above last month’s low of 1.2153. Downward momentum remains strong and from here, a break below 1.2153 would not be surprising. That said, any further weakness is expected to encounter strong support at 1.2130 (the next support at 1.2090/95 is a major level and is not expected to come into the picture). On the upside, resistance is at 1.2200 but only a move back above 1.2235 would indicate that the current weakness has stabilized”.

Next 1-3 weeks: “Our ‘focus level’ of 1.2153 that was indicated on Tuesday (24 Apr, 1.2205) was almost touched as EUR dropped to an overnight low of 1.2158. As noted, a clear break of 1.2153 would suggest that EUR is ready for a much deeper down-move in the weeks ahead (the next support below 1.2153 is at 1.2090). The prospect for a break of 1.2153 has improved but in view of the oversold shorter-term condition, EUR has to continue to extend lower or it would lose it momentum quickly. On the upside, a break of the ‘key resistance’ at 1.2270 (level previously at 1.2300) would indicate that a short-term low is in place”.