According to the currency strategists at UOB Group, there is still room for the EUR / USD to test the 1.2200 level next week.
Key Comments:
24 hour view: “The EUR / USD made a fresh high of 1.2177 last Friday (high of 1.2175 on Thursday) before giving way to close slightly lower at 1.2120 (-0.16%). While the overall move from the high is seen as part of a broader consolidation phase, the weakened underlying tone suggests there is room for EUR / USD to turn down to 1.2090. That said, any weakness is considered part of a lower range between 1.2090 and 1.2160. In other words, a sustained drop below 1.2090 is not expected ”.
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 ‘. The pair 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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