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FX Strategists at UOB Group suggested the possibility of extra gains in EUR/USD could be losing momentum in the short-term.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the overbought advance in EUR has scope to push above 1.1915’ but ‘the next resistance at 1.1960 is likely out of reach’. While EUR subsequently rose above 1.1915, the sharp and swift sell-off from a high of 1.1919 came as a surprise. Upward pressure has more or less dissipated and for today, EUR is likely to trade sideways, expected to be within a 1.1790/1.1880 range.”

Next 1-3 weeks: “We have held the same view since last Friday (06 Nov, spot at 1.1825) wherein the ‘outlook for EUR is positive’ but it ‘has to close above 1.1915 in order to indicate it is ready to move to the year-to-date high at 1.2011’. We highlighted yesterday that ‘in view of the severely overbought shorter-term conditions, the odds for such a move are not that high for now’. While EUR edged above 1.1915 (overnight high of 1.1919), the advance was short-lived as it dropped back down to end the day at 1.1813 (-0.50%). The odds for further EUR strength have diminished but only a break of 1.1780 (no change in ‘strong support’ level) would indicate that it is not ready for 1.2011.”