EUR/USD remains weak and targets 1.0805 – UOB

FX Strategists noted EUR/USD now shifted the attention to a probable test of the 1.0805 level in the near term.

Key Quotes

24-hour view: “Last Friday, we highlighted that ‘rapidly improving downward momentum suggests EUR could break the major support at 1.1000’. We added, ‘the next support below this level is at 1.0965’. While our view for a weaker EUR was not wrong, we did not anticipate the outsized sell-off as it nose-dived by 1.25% (NY close of 1.0926), its biggest 1-day drop since Mar 2020. EUR extended its decline during early Asian hours and further decline appears likely. The next support is a major level at 1.0805. Resistance is at 1.0895 followed by 1.0925.”

Next 1-3 weeks: “In our latest narrative from last Friday (04 Mar, spot at 1.1025), we highlighted the vulnerability of EUR and indicated that ‘a break of 1.1000 could potentially lead to further sharp decline in EUR as the next support level of note is at 1.1900’. Our view was not wrong as EUR nose-dived to 1.0884 before extending its decline during early Asian hours. EUR is still clearly weak and the next level to focus on is at 1.0805. This is a long-term support and a clear breach of this level could lead to further downward acceleration (next support is at 1.0740). The risk for further weakness is intact as long as EUR does not move above 1.1000 (‘strong resistance’ level was at 1.1125 last Friday). On a shorter-term note, 1.0925 is already a rather solid resistance level.”