EUR/USD risks a deeper pullback – UOB

“While the sharp overnight plunge in EUR appears to be running before itself, the decline has not stabilized. In other words, EUR is probably going to weaken further. in sight of the deeply oversold conditions, the support at 1.1920 is unlikely to return into the image (minor support at 1.1955). Resistance is at 1.2020 followed by 1.2050.”

Next 1-3 weeks: “On Monday (14 Jun, spot at 1.2110), we highlighted that improvement in downward momentum could lead on to EUR to ‘trade with a downward bias towards 1.2050’. After EUR traded during a quiet manner for a few of days, we noted yesterday (16 Jun) that ‘while momentum is starting to wane, there’s still chance for EUR to say no to 1.2050’. While our view for a weaker EUR wasn’t wrong, we didn’t anticipate the outsized decline of -1.07% yesterday (the decline is that the largest 1-day drop since March last year). Despite being oversold, EUR is probably going to weaken further albeit it’s left to be seen if it can break the main long-term support at 1.1920. All in, the danger remains on the downside unless EUR can move above 1.2080 (‘strong resistance’ level was at 1.2180 yesterday).”

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