EUR / USD maintains the consolidation movement

UOB Group’s currency strategists expect the EUR / USD moves within the 1.1720-1.1880 range in the coming weeks.

Key Comments:

24 hour view: “We highlighted yesterday that ‘the upward pressure has more or less dissipated’ and we expected the EUR / USD to ‘trade sideways within a 1.1790 / 1.1880 range.’ Subsequently, the EUR / USD moved between 1.1778 and 1.1843 before closing little changed at 1.1814 (+ 0.01%). Momentum indicators are mostly neutral and it would not be surprising if there were more sideways movement, although probably in a lower range of 1.1775 / 1.1855 ”.

Next 1-3 weeks: “EUR / USD fell a couple of pips below our ‘strong support’ of 1.1780 yesterday (low at 1.1778) before recovering to end the day little changed at 1.1814 (+ 0.01%). The price action was not surprising, as we highlighted yesterday that ‘the odds of further EUR / USD strength have diminished’. The breakout of the ‘strong support’ level indicates that EUR / USD is not ready to move towards the yearly high at 1.2011 (previously we held the view that EUR / USD has to close above 1.1915 before it can be expected a move to 1.2011). The current move is seen as the early stages of a consolidation phase, although the slightly subdued underlying tone suggests that EUR / USD is likely to dip first towards the lower part of the expected range of 1.1720 / 1.1880 ”.

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Credits: Forex Street

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