In opinion of FX Strategists at UOB Group, EUR/USD is now expected to trade within a sideline fashion.
Key Quotes
24-hour view: “We highlighted yesterday the recovery in EUR “could extend further but any advance is viewed as a higher trading range of 1.0900/1.0960″. EUR subsequently traded between 1.0902 and 1.0963 before ending the day on a firm note at 1.0958 (+0.26%). Upward momentum has improved, albeit not by much and this could lead to EUR testing the next resistance at 1.0990 before the advance ease off (next resistance is at 1.1025). Support it at 1.0930 followed by 1.0900. The latter level is likely strong enough to hold any intraday pullback in EUR”.
Next 1-3 weeks: “We highlighted the “quick loss in downward momentum” yesterday (02 Oct, spot at 1.0930) and held the view that the “odds for further EUR weakness have diminished”. The subsequent breach of the 1.0960 ‘strong resistance’ level ‘confirms’ that the weak phase that started earlier last week has run its course. The current movement is viewed as the early stages of a consolidation phase and for the couple of weeks, EUR is expected to trade sideways between 1.0890 and 1.1025″.
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