FX Strategists at UOB Group noted the outlook on EUR/USD remains positive while above the 1.1790 level.
24-hour view: “We highlighted yesterday that ‘upward momentum has waned considerably and the risk for EUR to move to 1.1920 from here is low’. We expected EUR to ‘consolidate and trade between 1.1830 and 1.1895’. EUR subsequently traded within a narrower range than expected (1.1847/1.1891) before closing little changed at 1.1852 (-0.08%). Further consolidation would not be surprising but the underlying tone has weakened somewhat and this could lead to EUR drifting lower but any weakness is viewed as a lower trading range of 1.1825/1.1875 (a sustained decline below 1.1825 is unlikely).”
Next 1-3 weeks: “There is not much to add to our update from yesterday (17 Nov, spot at 1.1860). As highlighted, upward momentum has improved slightly but EUR has to close above 1.1920 in order to indicate that it has moved out of its consolidation phase. Looking forward, the next resistance above 1.1920 is at 1.1970 (followed by the year-to-date high at 1.2011). The current slightly positive outlook is deemed as intact as long as EUR does not move below 1.1790 (no change in ‘strong support’ level).”