FX Strategists at UOB Group still believe EUR/USD could grind lower in the next weeks, although a test of 2020 low at 1.0635 appears unlikely.
24-hour view: “Our expectation for EUR to ‘edge higher towards 1.0860’ did not materialize as it traded in a relatively narrow range between 1.0766 and 1.0834 (68 pips), the smallest 1-day range in about 1-1/2 months. The underlying tone has weakened somewhat and this could lead to EUR drifting lower to 1.0750. For today, the next support at 1.0700 is not expected to come into the picture. Resistance is at 1.0835 followed by 1.0870.”
Next 1-3 weeks: “There is not much to add to our update from last Friday (03 Apr, spot at 1.0840). As highlighted, while there is room for EUR to weaken further, it is premature to expect a revisit of the March low of 1.0635 (1.0700 is already a strong support). To look at it another way, EUR is under mild downward pressure and could continue to edge lower in the coming days. On the upside, a break above 1.0930 (‘strong resistance’ level previously at 1.0980) would indicate the mild downward pressure has eased.”