EUR/USD now points to some consolidation – UOB
UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang suggest EUR/USD could now trade within the 1.0820-1.1020 for the time being.
24-hour view: “We highlighted yesterday that ‘further EUR strength is not ruled out but the major resistance at 1.1120 is unlikely to come into view’. EUR not only rose less than expected (high of 1.1033), it also dropped sharply to end the day lower by 0.72% (1.0910). Upward momentum has more or less dissipated and EUR is likely to trade in a range today, expected to be between 1.0860 and 1.0980.”
Next 1-3 weeks: “Yesterday (02 Feb, spot at 1.1005), we held the view that EUR has moved out of its consolidation phase and is likely to head higher to 1.1120. We did not expect the sharp pullback that breached our ‘strong support’ level at 1.0900 (low of 1.0883). The rapid loss of upward momentum suggests EUR is not ready to head to 1.1120 just yet. To put it another way, EUR could consolidate first before heading to 1.1120 at a later stage. In view of the elevated volatility, EUR could trade within a relatively broad range of 1.0820/1.1020 for the time being.”