According to FX Strategists at UOB Group, the pair could attempt a visit to the 1.1900 level in the next weeks.
Key Quotes
24-hour view: “We expected a higher EUR yesterday but were of the view that the strong 1.1830 resistance is “unlikely to be challenged”. However, EUR managed to break above 1.1830 to touch 1.1840 but the up-move was short-lived. The quick pull-back from the high suggests that a temporary top is in place. The current movement is viewed as part of a consolidation phase even though the immediate bias is for EUR to probe the bottom of the expected 1.1750/1.1830 consolidation range”.
Next 1-3 weeks: “We shifted from bearish to neutral on EUR on Tuesday (05 Jun, spot at 1.1700) and were of the view that EUR has moved into a consolidation phase. While we noted the “near-term bias is tilted to the upside”, we added “any advance is viewed as part of a 1.1600/1.1830 consolidation range”. The sharp and rapid advance in EUR yesterday was unexpected and in view of the vastly improved momentum outlook, 1.1830 is unlikely to be strong enough to cap the current EUR strength. In other words, we have to contend with a ‘stronger corrective rebound’ and a move to 1.1900 is not ruled out in the days ahead. On the downside, support is at 1.1730 but only a move below 1.1690 (‘key support’ level) would indicate that the current upward pressure has eased”.
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