FX Strategists at UOB Group now expect EUR/USD to trade within a 1.0950/1.1060 range in the next weeks.
Key Quotes
24-hour view: “While we indicated yesterday that there is “scope for advance in EUR to extend further”, we held the view “overbought conditions could ‘limit’ gains to 1.1080″. EUR subsequently touched 1.1084 before staging a surprisingly rapid and sharp pull-back. The pull-back amidst overbought conditions suggests 1.1084 could be a temporary top. That said, it is premature to expect a sustained decline. EUR is more likely to trade sideways to slightly lower, expected to be within a 1.0995/1.1060 range”.
Next 1-3 weeks: “EUR tested the minor 1.1080 resistance (high of 1.1084) before dropping back quickly to end the day unchanged at 1.1033. The price action bolstered our view from yesterday (05 Sep, spot at 1.1035) wherein the current movement is viewed as the “early stages of a consolidation phase”. In other words, we continue to expect EUR to trade sideways between 1.0950 and 1.1110″.
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