FX Strategists at UOB Group noted EUR/USD has now moved into a 1.1950-1.2150 trading range.
Key Quotes
24-hour view: “Last Friday, we highlighted that ‘the sharp and rapid decline appears to be overdone but further EUR weakness is not ruled out’. We added, ‘the next major support at 1.1910 is likely out of reach for now’. EUR subsequently dropped to 1.1950 before staging a surprisingly sharp and robust bounce (high of 1.2049 during NY hours). The rapid rise appears to be running ahead of itself and further sustained advance is unlikely. EUR is more likely to trade sideways at these higher levels, expected to be between 1.2010 and 1.2075.”
Next 1-3 weeks: “We highlighted last Friday that ‘momentum remains strong and further EUR weakness towards the next support at 1.1910 seems likely’. We did not anticipate the sudden sharp bounce from 1.1950 to 1.2049. While our ‘strong resistance’ level at 1.2055 is still intact, momentum has waned considerably and the prospect for EUR to move to 1.1910 has more less dissipated. In other words, the weak phase in EUR that started late last month has run its course. From here, EUR is deemed to have moved into a consolidation phase between 1.1950 and 1.2150. Looking ahead, barring a clear break above 1.2150, EUR is expected to mount another attempt to move closer to 1.1900 at a later stage.”
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