The currency strategists of UOB Group maintain a Bullish view on EUR / USD in the short term.
24 hour perspective: “Our expectation for the EUR to decline did not materialize as it traded between 1.2240 and 1.2306 before settling at 1.2294 (+ 0.38%). The bullish momentum is beginning to improve and the euro appears ready to move above the 1.2309 ceiling seen earlier this week. Having said that, 1.2330 is another strong level and it remains to be seen whether the euro can clearly move above this level. He support is at 1.2275but only a break of 1.2250 would indicate that the current upward pressure has eased.
Next 1-3 weeks: “On Monday (Jan 4, pair at 1.2235), we highlighted that ‘the odds of further strength in the EUR would decline rapidly unless it rises above 1.2309 and remains above this level in these few days.’ The EUR has held below 1.2309 the last few days, but short-term momentum is starting to improve. A clear breakout of 1.2309 would shift focus to 1.2330 followed by 1.2360. All in all, the outlook for a sustained move above 1.2309 has increased, but the EUR should stay above 1.2200 (previously ‘strong support’ level at 1.2170). “