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major support emerges at 1.1065 – UOB

According to FX Strategists at UOB Group, EUR/USD remains exposed to further weakness although a break below 1.1065 looks highly unlikely for the time being.

Key Quotes

24-hour view: “In our update yesterday, we cited that while ‘a bounce to 1.1135 may be on the cards … it is unlikely extend any further than 1.1150’. EUR touched a high of 1.1146 in the NY session and have pulled back since. While EUR may continue to advance, the pace is likely a measured one as momentum remains modest at best. 1.1150 may come into focus again but a sustained push beyond the next strong level of 1.1170 will likely not come to pass. On the downside, look for 1.1110 to support and a move below 1.1090 will indicate that the upside pressures have eased.”

24-hour view: “Downward momentum has improved further and the risk for EUR is still on the downside. However, the mid-Dec low near 1.1065 is a major support and at this stage, the prospect for a sustained decline below this level is not high. Overall, EUR is expected to remain on the back foot unless it can move above 1.1175 (‘key resistance’ level was at 1.1195 yesterday). Looking ahead, even if EUR were to break below 1.1065, any further weakness is expected to encounter solid support at 1.1030 followed by 1.1000. In other words, we do not consider the current weakness in EUR as part of a major downtrend.”

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