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FX Strategists at UOB Group believe the pair could attempt some consolidation ahead of another leg lower.

Key Quotes

24-hour view: “We expected EUR to “trade sideways to slightly higher” yesterday but the registered range of 1.1333/1.1409 was much higher than our anticipated consolidation range of 1.1315/1.1375. Nevertheless, we continue to view the current price action as part of a broader consolidation phase and expect EUR to trade sideways from here. Expected range for today, 1.1330/1.1405″.

Next 1-3 weeks: “There is not much to add to yesterday’s update (16 Aug). As highlighted, “short-term indicators are at severely ‘oversold’ levels and this coupled with signs of momentum waning could lead to a couple of days of consolidation first”. We added, “the next major support at 1.1185 is not expected to come into the picture so soon”. Overall, the current consolidation phase could last for a few days more and only an unlikely break of 1.1460 (no change in the ‘stop-loss’ level) would indicate that the bearish phase has ended. Near-term, a move above 1.1430 would greatly increase the risk that the 1.1297 low seen on Wednesday (15 Aug) is a short-term bottom”.