According to FX Strategists at UOB Group, the upside momentum in EUR/USD seems to be losing momentum.
Key Quotes
24-hour view: “We highlighted yesterday, ‘upward momentum has eased and the 1.1451 high is likely an interim top’ and we expected EUR ‘to consolidate and trade between 1.1380 and 1.1445’. EUR rose to a high of 1.1442 during NY hours before dropping sharply and quickly to a low of 1.1369 (closed at 1.1383, -0.24%). The weakened underlying tone suggests EUR could drift lower from here but for today, any decline is likely limited to a test of the 1.1350 support (next support is unlikely to come into the picture). Resistance is at 1.1405 followed by 1.1425.”
Next 1-3 weeks: “On Wednesday (15 Jul, spot at 1.1410) we indicated that EUR ‘is expected to trade with a positive note’. However, held the view that ‘the current momentum may not be enough to carry EUR above the year-to-date high of 1.1492’. EUR subsequently tried but failed to break clearly above 1.1450 (high of 1.1451 on Wednesday and 1.1442 yesterday). Upward momentum has been dented but for now there is no change in our view wherein there is still chance for EUR to move closer to 1.1492. Only a break of 1.1320 (no change in ‘strong support’ level) would indicate the current upward pressure has dissipated.”
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