The likeliness of further downside in the short-term horizon remains well on the cards, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We indicated yesterday that the strong up-move in EUR “has room to move above the overnight high of 1.1615 but a break of last week’s top of 1.1659 is not expected” and added, “1.1640 is already a strong level”. EUR subsequently rose to a high of 1.1643 before easing off quickly. Upward pressure has eased and we view the current movement as part of a consolidation phase. In other words, we expect EUR to trade sideways for today, likely within a 1.1560/1.1630 range”.
Next 1-3 weeks: “EUR tested the top of our expected 1.1470/1.1640 consolidation range yesterday as it touched a high 1.1643. The swift pullback from the high reinforces our current neutral view even though we continue to see chance for EUR to probe the bottom of the expected consolidation range. Overall, the current movement is viewed as part of consolidation phase that could last for another couple more weeks. In other words, we do not expect EUR to embark on a sustained directional move anytime soon”.
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