EUR/USD keeps pointing to further consolidation – UOB

FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang noted EUR/USD is expected to trade between 1.0755 and 1.0935.

Key Quotes

24-hour view: “We highlighted yesterday that ‘there is scope for EUR to advance further to 1.0885’ and we were of the view that ‘a sustained rise above this level is unlikely’. However, EUR cracked 1.0885, soared to 1.0936 before dropping back down quickly to end the day at 1.0836 (0.13%). While the pullback from the high has room to extend, downward momentum is not strong and any weakness is likely limited to a test of 1.0805. The major support at 1.0855 is not expected to come under threat. Resistance is at 1.0860 followed by 1.0890.”

Next 1-3 weeks: “Yesterday (21 Apr, spot at 1.0845), we highlighted that downward pressure has dissipated and we held the view that the rebound in EUR could extend to 1.0885. While our view for the rebound in EUR to extend was not wrong, we did not expect the subsequent sharp but short-lived advance to 1.0936. The rapid pullback from the high suggests that the rebound in EUR is unlikely to extend further. From here, EUR is likely to consolidate and trade between the two major levels of 1.0755 and 1.0935.”