According to FX Strategists at UOB Group, EUR/USD faces some consolidation in the near term and a potential move lower.
Key Quotes
24-hour view: “Instead of “trading sideways”, EUR recouped most of Monday’s decline as it closed higher at 1.1018 (+0.25%). While upward momentum has not really improved, the recovery has room to test 1.1045. For today, a sustained rise above this level is not expected (next resistance is 1.1075). Support is at 1.1000 followed by 1.0980″.
Next 1-3 weeks: “While downward momentum has picked up, we still view the current price action as part of a broad sideway-trading phase (same view since 13 Sep, spot at 1.1055). That said, the weakened underlying tone suggests it could edge lower towards the bottom of the expected 1.0925/1.1100 range first range (narrowed from 1.0925/1.1130 previously). At this stage, the prospect for a sustained decline below 1.0925 is not high”.
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