According to FX Strategists at UOB Group, EUR/USD is now seen navigating between 1.1640 and 1.1820 for the time being.
Key Quotes
24-hour view: “We highlighted yesterday that ‘while rapid improvement in momentum suggests further EUR strength is likely, overbought conditions could ‘limit’ any gains to a test of the major resistance at 1.1830’. The subsequent EUR strength fell short of our expectation as it plummeted after touching a high of 1.1807 (overnight low of 1.1730). The rapid decline appears to be running ahead of itself. That said, there is no sign of stabilization just yet and EUR could edge downwards to 1.1700. For today, the next support at 1.1670 is likely out of reach. On the upside, 1.1790 is expected to be strong enough to cap any recovery (minor resistance is at 1.1765).”
Next 1-3 weeks: “Yesterday, we highlighted that ‘as EUR approaches 1.1830, upward momentum has improved, albeit not by much’. We added, ‘there is room for EUR to edge above 1.1830 and move towards the next resistance at 1.1870’. EUR subsequently rose to a high of 1.1807 before dropping suddenly to an overnight low of 1.1730. While our ‘strong support’ level at 1.1715 is still intact, the rapid loss in momentum indicates that our expectation for a higher EUR is incorrect. From here, it seems that EUR has lapsed back into a consolidation phase and is likely trade between 1.1640 and 1.1820 for now.”
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