In view of FX Strategists at UOB Group, the pair seems to have entered a consolidation phase.
Key Quotes
24-hour view: “Expectation for EUR to trade sideways was wrong as it rose and hit a high of 1.1744 before easing off quickly. While upward momentum is patchy at best, the improved undertone suggests that there is room for a retest of the 1.1740/45 level before a more sustained pullback can be expected At this stage, we do not anticipate a sustained move above 1.1740/45 (next resistance is at 1.1780). On the downside, only a break back below 1.1655 would indicate that the current mild upward pressure has eased”.
Next 1-3 weeks: “We highlighted the “diminished odds for further EUR weakness” in recent updates and the break of the ‘stop-loss’ at 1.1730 yesterday confirms that the bearish phase has ended. The current movement is viewed as part of a neutral consolidation phase and we expect EUR to trade sideways from here. Near-term, the bias is tilted to the upside but any advance is considered as part of a 1.1600/1.1830 consolidation range and not the start of a sustained up-move”.
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