In the opinion of the currency strategists of UOB Group, the EUR / USD could have now moved into a consolidation range between 1.2000 and 1.2130.
24 hour perspective: “Our expectation that the EUR would test 1.1975 was incorrect as it rallied strongly from 1.1991 (yesterday’s high of 1.2071). The rebound has room to extend to 1.2090, but in view of overbought conditions, a sustained rise above this level is unlikely (the next resistance is at 1.2130). The support is at 1.2045 followed by 1.2030 “.
Next 1-3 weeks: “On Wednesday (May 5, pair at 1.2015), we noted that ‘bearish momentum had improved and a breakout of 1.1975 would suggest that the EUR could weaken to 1.1920’. The EUR rallied strongly yesterday and 1.1975 remains intact. While our strong resistance level at 1.2080 is not broken (1.2071 high), the downside pressure has more or less dissipated. In other words, the EUR pullback that started earlier this week is not ready to move lower on a sustained basis. From now on, EUR is expected to trade within a range of 1.2000 / 1.2130 “.
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