EUR/USD pullbacks could see 1.2100 tested – UOB

The recent price action around the pair allows for a probable visit to the 1.2100 region, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Expectation for range trading was wrong as EUR plummeted to hit an overnight low of 1.2219. While the rapid and sharp decline appears to be running ahead of itself, a dip below the month-to-date low of 1.2204 would not be surprising. However, the next support at 1.2165 is likely of reach. Stabilization is only upon a move back above 1.2295 (minor resistance is at 1.2265)”.

Next 1-3 weeks: “We have held a ‘negative’ view on EUR since last Thursday and highlighted the increasing odds of further weakness towards 1.2204. EUR finally cracked the rising trend-line support and plummeted to an overnight low of 1.2219. Downward momentum has improved further and the month-to-date low of 1.2204 appears to be within reach. A clear break of this rather critical support would suggest that the current weakness in EUR has scope to extend further towards the next major and solid support just below 1.2100 (the high in September last year which coincides with the rising trend-line from April). For the next few days, downward pressure would continue to increase unless EUR can reclaim 1.2350. On a shorter-term note, 1.2295 is already a rather strong resistance level”.