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According to FX Strategists at UOB Group, a potential move to 1.1390 in EUR/USD seems to be losing traction.

Key Quotes

24-hour view: “Yesterday, we held the view that EUR “could edge lower but any weakness is viewed as part of a 1.1260/1.1360 consolidation range”. EUR subsequently dipped to 1.1266 before staging a mild recovery back to 1.1319. Momentum indicators are mostly ‘neutral’ and EUR could continue to consolidate for today, expected to be within a 1.1260/1.1335 range.”

Next 1-3 weeks: “We highlighted last Friday (05 Jun, spot 1.1355) that “if EUR can clearly move above 1.1390, it would greatly increase the odds for a move to the March’s peak near 1.1495”. We added, “in order to maintain the current impulsive momentum (amid severely overbought conditions), EUR could not afford to dither or the risk of a short-term top would increase quickly”. EUR subsequently retreated after touching 1.1383 and traded in a relatively quiet manner yesterday (08 Jun). Upward momentum is starting to wane and would continue to do so unless EUR heads north soon. In other words, the prospect for EUR to move above 1.1390 is beginning to dim. On the downside, a breach of 1.1220 (no change in ‘strong support’ level) would mark the end of the positive phase that started more than a week ago and the beginning of a consolidation phase.”

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