EUR/USD set to challenge key support at 1.0806 – MUFG

The euro is continuing to trade on a weaker footing. Barring a hawkish surprise from the Euroeapn Central Brank (ECB), the EUR/USD pair looks poised to test the the low from 7th March at 1.0806, economists at MUFG report.

Ukraine conflict remain weight on EUR 

“The price action continues to suggest strongly that some form of de-escalation of the Ukraine conflict will be required to trigger a reversal of the current bearish trend for the euro.” 

“In current conditions the euro should continue to remain weak in the near-term absent a significant hawkish policy surprise from the ECB that brings forward rate hike expectations earlier into Q3.” 

“The next important technical support level to watch on the downside is the low from 7th March that comes in at 1.0806.” 

“The release today of the account from the March ECB policy meeting is the key event to watch today that poses some upside risk for the euro although it is not normally a big market mover.”