FX Strategists at UOB Group noted EUR/USD is seen sticking to the rangebound theme for the time being.
Key Quotes
24-hour view: “Yesterday, we were of the view that ‘the overall risk has shifted to the downside but oversold conditions could ‘limit’ any further decline to 1.0815’. Our expectation was not wrong as EUR dropped to 1.0816 during NY hours before rebounding. Downward momentum is beginning to ease but it is too soon to expect a sustained recovery. From here, EUR could drift lower but any weakness is viewed as part of a 1.0805/1.0905 range (a clear break below 1.0805 is unlikely).”
Next 1-3 weeks: “After the relatively strong advance in EUR on Tuesday (14 Apr), we noted yesterday (15 Apr, spot at 1.0980) that ‘upward momentum is showing sign of picking up but at this stage, it is premature to expect the start of a sustained advance’. We added, ‘only a NY closing above 1.1030 would increase the odds for EUR to move towards the late-March peak of 1.1146’. However, we did not anticipate the sudden turnaround that sent EUR tumbling to an overnight low of 1.0855. Upward momentum has fizzled out and the overall outlook is mixed. From here, EUR could continue to trade in an undecided manner within the 1.0750/1.1000 range that we first indicated last Wednesday (08 Apr, spot at 1.0890).”
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