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EUR/USD is seen sticking to the ongoing consolidation trade in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “While we highlighted yesterday that ‘upward pressure has eased somewhat’, we expected EUR ‘to trade between 1.1270 and 1.1350’. However, instead of consolidating, EUR dropped sharply to a low of 1.1247 before ending the day on a soft note a 1.1250 (-0.50%). Downward momentum has picked up, albeit not by much. From here, barring a move 1.1300 (minor resistance is at 1.1275), EUR could drift lower towards 1.1210. For today, the major support at 1.1170 is not expected to come into the picture.”

Next 1-3 weeks: “While EUR closed on a relatively strong note for the second day in a row (1.1306, +0.43%), there is no change to our view. As highlighted yesterday (23 Jun, spot at 1.1270), the movement in EUR is viewed as a consolidation phase and EUR is expected to trade between 1.1170 and 1.1380 for a period. Looking forward, the risk appears to be higher on the upside but EUR has to close above 1.1400 in order to indicate it is ready to move towards the March’s peak at 1.1492. At this stage, the odds for such a scenario are not high.”