FX Strategists at UOB Group noted the positive outlook for EUR/USD, which continues to target the 1.2200 level.
Key Quotes
24-hour view; “We expected EUR to ‘edge downwards within a lower range of 1.2090/1.2160’ yesterday and we were of the view ‘a sustained decline below 1.2090 is not expected’. EUR subsequently dipped to a low of 1.2077 before rebounding quickly to an overnight high of 1.2166. The current movement is still viewed as part of a consolidation phase. That said, the weakened underlying tone suggests EUR is likely to trade within a lower range of 1.2065/1.2150.”
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.”
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