UOB Group currency strategists highlight the positive outlook for EUR / USD, which continues to target the 1.2200 level.
Key Comments:
24 hour view: “We expected EUR / USD yesterday to ‘fall into a lower range of 1.2090 / 1.2160’ and we are of the opinion that ‘no sustained decline below 1.2090 is expected.’ Thereafter, EUR / USD fell to a low of 1.2077 before bouncing quickly to a high of 1.2166. The current move is still considered part of a consolidation phase. That being said, the weakened underlying tone suggests that EUR / USD is likely to move into a lower range of 1.2065 / 1.2150 “.
Next 1-3 weeks: “We have maintained a positive view on the EUR / USD since the end of last month. In our last comment last Wednesday (December 2, EUR / USD at 1.2065), we highlighted that the EUR / USD ‘has moved to its next bullish leg; the focus is at 1.2200 ‘. EUR / USD rose to a high of 1.2177 on Friday and short-term overbought conditions could lead to a few days of consolidation first. As long as 1.2040 (previously ‘strong support’ level at 1.2010) is intact, there is still a chance that EUR / USD will move to 1.2200 “.
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