EUR/USD likely to test 1.2240 very near term – UOB

According to FX Strategists at UOB Group, the pair’s downside could extend to the 1.2240 region in the very near term.

Key Quotes

24-hour view: “The ‘target’ indicated at 1.2270 last Friday was exceeded as EUR dropped to a low of 1.2259. While downward momentum is showing signs of waning, another dip towards the strong 1.2240 support seems likely (before a recovery can be expected). The next support is further down at 1.2200 and at this stage, we do not expect this level to be threatened. Resistance is at 1.2315 but the stronger level is closer to 1.2345”.

Next 1-3 weeks: “The ease of which EUR took out the strong 1.2270 support was not exactly expected. As highlighted last Friday (16 Mar, spot at 1.2305), a break of this level would indicate that the immediate pressure has shifted to the downside. While we are not ready to adopt a full-fledged bearish stance just yet, we expect EUR to move lower from here and test the next strong support at 1.2200. Only a move back above 1.2385 would indicate that the current downward pressure has eased. On a shorter-term note, 1.2345 is already a strong resistance”.