EUR/USD short-term low around 1.1900? – UOB

In view of FX Strategists at UOB Group, the pair could place a short-term low if manages to trade above 1.1915/10.

Key Quotes

24-hour view: “Expectation for sideways trading last Friday was wrong as EUR plummeted to a low of 1.1909. The down-move was however short-lived and the subsequent rapid rebound from the low has resulted in a loss in downward momentum. While the risk for further weakness is quite low for today, it is too soon to expect a sustained recovery. EUR is more likely to consolidate its loss and trade sideways at these lower levels. Expected range for today; 1.1930/1.2000”.

Next 1-3 weeks: “The 1.1915 ‘target’ that was first highlighted last Wednesday (02 May, spot at 1.1995) was exceeded marginally as EUR briefly hit a low of 1.1909 last Friday. The lack of a ‘follow-through’ upon the break of this critical level coupled with the subsequent quick recovery indicates that the current oversold momentum is finding it difficult to maintain its downside traction. That said, only a break above the ‘stop-loss’ at 1.2050 (level adjusted from 1.2090 previously) would indicate that the bearish phase that started early last week has ended. Until then, another ‘down-leg’ towards the next support at 1.1850 is not ruled out but in order for this to happen, EUR has to break clearly below 1.1910/15 and stay below this level within these 1 to 2 days or a prolonged consolidation at these lower levels would quickly increase the risk of a short-term low”.