FX Strategists at UOB Group now believe EUR/USD could extend the sideline theme between 1.12 and 1.13 in the near term.
Key Quotes
24-hour view: “Although EUR did not test July’s highs of 1.1281 yesterday as expected, the resulting pullback was relatively shallow and EUR turning well ahead of the stated support at 1.1140 (low: 1.1166). Overall, upside momentum has been reduced significantly and it would take some time for it to rebuild, if any. So, EUR is likely to consolidate recent gains at a higher range of 1.1175 to 1.1270 at least for today”.
Next 1-3 weeks: “As we reported in yesterday’s report, a NY close above 1.1130 would negate the ‘downside phase’. EUR closed up for a third day, by 0.85% to 1.1202. While upwards momentum appears strong, we are still not convinced to transit into a ‘positive phase’ as yet. As such, EUR is likely to consolidate recent gains and trades in a higher range between 1.1200 and 1.1300. A drop below 1.1160 indicates that the recent strength in EUR has ran its course and may be resuming its downtrend”.
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