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According to FX Strategists at UOB Group, there is still room for EUR/USD to test the 1.2200 mark in the next week.

Key Quotes

24-hour view: “EUR eked out a fresh high of 1.2177 last Friday (high of 1.2175 on Thursday) before easing off to close slightly lower at 1.2120 (-0.16%). While the overall movement from the high is viewed as part of a broader consolidation phase, the weakened underlying tone suggests room for EUR to edge lower to 1.2090. That said, any weakness is viewed as part of a lower range of 1.2090/1.2160. In other words, a sustained decline below 1.2090 is not expected.”

Next 1-3 weeks: “We have held a positive view in EUR since late last month. In our latest narrative from last Wednesday (02 Dec, spot at 1.2065), we highlighted that EUR ‘has moved into its next up-leg; focus is at 1.2200’. EUR rose to a high of 1.2177 on Friday and shorter-term overbought conditions could lead to a few days of consolidation first. As long as 1.2040 (‘strong support’ level previously at 1.2010) is intact, there is still chance for EUR to move to 1.2200.”