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FX Strategists at UOB Group noted the positive phase in EUR/USD seems to have ended and is now expected to trade sideways in the next weeks.

Key Quotes

24-hour view: “Our expectation for EUR to ‘head higher to 1.2360’ was wrong as it plunged to 1.2243 after touching a high of 1.2345. The rapid decline appears to be running ahead of itself but there is scope for EUR to test 1.2225 first before the current weakness should stabilize. Resistance is at 1.2295 followed by 1.2320.”

Next 1-3 weeks: “The sudden sharp drop in EUR came as a surprise. While our ‘strong support’ level at 1.2240 is still intact (overnight low of 1.2243), upward momentum has dissipated. In other words, the positive phase in EUR that started earlier this week has come to an end (we were expecting a move to 1.2360). The current movement is viewed as the early stages of a consolidation and EUR is expected to trade between 1.2195 and 1.2350 for a period of time.”