UOB discusses EUR/USD technical outlook and flags a scope for a move towards 1.0945 on a break of 1.0980 in the near-term.
We highlighted yesterday (05 Feb, spot at 1.1045) that “unless EUR recover soon, current price action looks more akin to be part of a consolidation phase instead of a strong rebound”. While the subsequent breach of the ‘strong support’ level at 1.1015 was not surprising, the relatively sharp decline of -0.40% (NY close of 1.0997) was not expected.
Downward momentum has picked up and the strong support zone between 1.0980 and 1.0990 is vulnerable. A break of these solid levels would increase the odds for a move below the mid-term support at 1.0945," UOB notes.
"Overall, the current nascent pick up in downward momentum is likely to gather pace unless EUR can move above 1.1055 within these few days," UOB adds.