FX Strategists at UOB Group noted EUR/USD is seen firm and is expected to edge higher in the next weeks.
24-hour view: “Yesterday, we held the view that ‘there is room for EUR to test 1.1955 first before a pullback can be expected’. Our expectation did not quite turn out as EUR retreated after touching a high of 1.1940. The build-up in momentum has waned considerably and EUR is unlikely to strengthen for today. Overall, the current movement is viewed as part of a consolidation phase and EUR is likely to trade within a 1.1880/1.1935 range.”
Next 1-3 weeks: “Two days ago (24 Nov, spot at 1.1845), we held the view that EUR ‘could trade sideways for a period of time and only a break out of the expected 1.1760/1.1920 range would indicate the start of a more sustained directional movement’. While EUR cracked the solid resistance at 1.1920 yesterday, the subsequent price actions were surprisingly muted (high of 1.1929). That said, further EUR strength is expected even though any advance could be slow going and the next resistance at 1.1980 may not come into the picture so soon. On the downside, a break of 1.1840 (‘strong support’ level) would indicate that the risk for further EUR strength has dissipated.”