EUR/USD neutral, faces further consolidation – UOB

In opinion of FX Strategists at UOB Group, the pair is poised to extend the consolidative theme for the time being.

Key Quotes

24-hour view: “We expected EUR to “drift lower and test the strong 1.1555 support yesterday”. The anticipated weakness exceeded our expectation as EUR dropped to a low of 1.1527 before staging a robust recovery. Downward pressure has clearly eased and the 1.1527 low is deemed as a short-term bottom and we do not expect this level to come into the picture for today. That said, it is unlikely that the current recovery would extend much higher and any EUR strength from here is viewed as part of a higher 1.1550/1.1620 consolidation range”.

Next 1-3 weeks: “EUR rebounded slightly after touching a low of 1.1582 yesterday. We continue to view last week’s 1.1733 peak as a short-term top and expect this level to remain intact for the next one week or so. The sharp decline from last Friday has room to extend lower but at this stage, we view any weakness as part of a 1.1520/1.1675 consolidation range and not the start of a sustained down-move”.