FX Strategists at UOB Group noted EUR/USD risks potential retracements in the near-term.
24-hour view: “We expected EUR to ‘drift lower to 1.1210’ yesterday but held the view that ‘the major support at 1.1170 is not expected to come into the picture’. Instead of ‘drifting lower’, EUR dropped sharply to 1.1189 before rebounding quickly. While downward pressure has eased, EUR does not appear to be ready for a sustained rebound just yet. From here, EUR could test the 1.1170 support first before a more sustained recovery can be expected (minor support is at 1.1195). Resistance is at 1.1245 followed by 1.1275.”
Next 1-3 weeks: “There is not much to add to our update from Tuesday (23 Jun, spot at 1.1270). As highlighted, the movement in EUR is viewed as part of a consolidation phase and EUR is expected to trade between 1.1170 and 1.1380 for a period. While downward pressure has ticked up over the past couple of days, EUR has to close below 1.1170 before a more sustained weakness in EUR can be expected. At this stage, the prospect for such a move is not high but it would continue to increase unless EUR moves and stays above 1.1300 within these 1 to 2 days.”