EUR/USD seen testing 1.1880 very near term – UOB

FX Strategists at UOB Group note the pair’s undertone remains bearish and a test of 1.1880 is expected in the very near term.

Key Quotes

24-hour view: “Expectation for EUR to consolidate and trade sideways yesterday was wrong as it dipped below 1.1900 to touch 1.1896 before rebounding quickly. While the undertone is still weak, downward momentum is lackluster and we do not expect EUR to ‘accelerate’ lower. From here, barring a move back above 1.1980 (minor resistance is at 1.1955), EUR is expected to grind lower towards 1.1880. The next support at 1.1850 is likely out of reach for now”.

Next 1-3 weeks: “There is not much to add to the Chart of the Day update from yesterday (07 May, spot at 1.1960). As noted, EUR has to “stay below 1.1910/15 or the risk of a short-term low would increase quickly”. EUR subsequent dipped to a low of 1.1896 before rebounding to end at 1.1920 in NY. The price action continues to suggest that the current oversold momentum is finding it difficult to maintain its downside traction and unless EUR can ‘accelerate’ lower soon, the risk of a short-term low would increase further. Support is at 1.1850 followed by 1.1800. On the upside, the ‘stop-loss’ level remains unchanged at 1.2050 for now”.