FX Strategists at UOB Group believe the pair could attempt some consolidation ahead of another leg lower.
Key Quotes
24-hour view: “We expected EUR to “trade sideways to slightly higher” yesterday but the registered range of 1.1333/1.1409 was much higher than our anticipated consolidation range of 1.1315/1.1375. Nevertheless, we continue to view the current price action as part of a broader consolidation phase and expect EUR to trade sideways from here. Expected range for today, 1.1330/1.1405″.
Next 1-3 weeks: “There is not much to add to yesterday’s update (16 Aug). As highlighted, “short-term indicators are at severely ‘oversold’ levels and this coupled with signs of momentum waning could lead to a couple of days of consolidation first”. We added, “the next major support at 1.1185 is not expected to come into the picture so soon”. Overall, the current consolidation phase could last for a few days more and only an unlikely break of 1.1460 (no change in the ‘stop-loss’ level) would indicate that the bearish phase has ended. Near-term, a move above 1.1430 would greatly increase the risk that the 1.1297 low seen on Wednesday (15 Aug) is a short-term bottom”.
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