EUR/USD remains within the consolidative theme – UOB

EUR/USD is likely to keep trading within the 1.1720-1.1880 range in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected EUR to ‘trade at a lower range of 1.1775/1.1855’ yesterday but it cracked 1.1775, dropped to 1.1744 before rebounding. Downward momentum has improved, albeit by just a tad. While the bias is tilted to the downside, the major support at 1.1720 is unlikely to come into the picture (the overnight low of 1.744 is acting as a minor support). On the upside, a break of 1.1815 would indicate the current mild downward pressure has eased (minor resistance is at 1.1800).”

Next 1-3 weeks: “EUR dipped a couple of pips below our ‘strong support’ of 1.1780 yesterday (low of 1.1778) before recovering to end the day little changed at 1.1814 (+0.01%). The price action was not surprising as we highlighted earlier yesterday that ‘odds for further EUR strength have diminished’. The break of the ‘strong support’ level indicates that EUR is not ready to move towards the year-to-date at 1.2011 (we previously held the view that EUR has to close above 1.1915 before a move to 1.2011 can be expected). The current movement is viewed as the early stages of a consolidation phase even though the slightly soft underlying tone suggests EUR is likely to edge lower towards the bottom of the expected 1.1720/1.1880 range first.”