FX Strategists at UOB Group noted EUR/USD faces a probable continuation of the consolidative stance in the near term, likely between 1.0730 and 1.0950.
Key Quotes
24-hour view: “Our view that EUR ‘could edge lower but is unlikely to threaten the strong support at 1.0870’ is incorrect as EUR cracked 1.0870 and plummeted to a low of 1.0824 during London hours. The rapid decline is running ahead of itself but is not showing sign of stabilization just yet. From here, there is room for EUR to dip below 1.0800 first before a recovery can be expected. The next support at 1.0770 is unlikely to come into the picture. Resistance is at 1.0860 but only a move above 1.0890 would indicate the current weakness has stabilized.”
Next 1-3 weeks: “Our view from two days ago (04 May, spot at 1.0955) for EUR to ‘trade with an upward bias and test 1.1070’ was proven wrong quickly as it easily cracked the ‘strong support’ level at 1.0870 yesterday (low of 1.0824). The recent sharp but short-lived swings have resulted in a mixed outlook. From here, EUR could continue to trade in an erratic manner and within a relatively broad range of 1.0730/1.0950 for a period.”
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