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FX Strategists at UOB Group expect EUR/USD to keep navigating between the 1.1600 and 1.1880 in the next weeks.

Key Quotes

24-hour view: “Our expectation for EUR to weaken yesterday was incorrect as it rose to a high of 1.1807 before retreating quickly and ended the day little changed at 1.1739 (+0.03%). We continue to detect a soft underlying tone and see chance for EUR to drift lower towards 1.1700. For today, the next support at 1.1670 is likely out of reach. Resistance is at 1.1770 but the stronger level is at 1.1800.”

Next 1-3 weeks: “Last Tuesday (04 Aug, spot at 1.1760), we held the view that ‘the 3-week positive phase has run its course’ and we expected EUR to ‘trade sideways between 1.1600 and 1.1900’. After EUR popped higher, we indicated on Thursday (06 Aug, spot at 1.1870) that ‘upward momentum is beginning to improve but only a daily closing above 1.1930 would indicate that EUR is ready for 1.2000’. EUR subsequently eked out a fresh high of 1.1915 but was unable to hold on to its gains. The swift and relatively sharp decline last Friday suggests that 1.1915 could be a short-term top. While EUR is likely to trade below 1.1915 for the next couple of weeks, any weakness is viewed as part of a broad 1.1600/1.1880 range. In other words, barring a sharp and sudden pick up in downward momentum, any weakness in EUR is likely to be slow and a sustained decline below 1.1600 is unlikely.”