EUR/USD still neutral near term – UOB

The pair keeps the neutral stance so far, with the focus of attention on the 1.1980 area, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We indicated yesterday that “further upside pressure is likely but 1.1950 is expected to offer solid resistance”. In line with expectation, EUR moved higher but the advance was checked by 1.1950 (high of 1.1949). The upward pressure has eased and the current movement is viewed as part of a consolidation phase. In other words, EUR is expected to trade sideways from here, likely between 1.1890 and 1.1950 (at least until ECB’s monetary policy announcement this evening)”.

Next 1-3 weeks: “There is not much to add as EUR continues to trade sideways. While the undertone has improved somewhat, it is too early to expect a resumption of the recent bullish phase. That said, the immediate bias is tilted on the upside but the strong resistance at 1.1980 is unlikely to yield so easily. In other words, we continue to expect EUR to trade sideways albeit at a narrower range of 1.1820/1.1980 instead of the 1.1770/1.1980 expected previously. Only a clear break out of this range would indicate the start of a directional move”.