EUR/USD faces further consolidation – UOB

UOB Group’s FX Strategists noted EUR/USD could navigate within the 1.1240-1.1395 range in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that EUR ‘is unlikely to weaken much further’ and expected it to consolidate and trade between 1.1275 and 1.1345”. EUR subsequently traded within a narrower range than expected (1.1270/1.1322) before closing little changed at 1.1285 (-0.08%). While the underlying tone has weakened somewhat, the downside risk appears to be limited. From here, EUR could edge lower, but any weakness is viewed as part of a trading range of 1.1265/1.1310.”

Next 1-3 weeks: “Our view from yesterday (04 Jan, spot at 1.1305) still stands. As highlighted, while downward momentum has improved a tad, the outlook for EUR is unclear for now. From here, EUR could trade between 1.1240 and 1.1395.”