Possible consolidation in the short term – UOB

In the view of UOB Group currency strategists, it is likely that EUR / USD enters a short-term consolidation phase, while the strong resistance remains at 1.2185.

Key Comments:

24 hour view: “We highlighted yesterday that EUR / USD ‘could break the main resistance at 1.2115’. We add, ‘overbought conditions suggest that it may not be able to stay above this level and next resistance at 1.2145 is unlikely to enter. scene. ” Our view was not wrong as EUR / USD rose to 1.2116 before rapidly retreating. Bullish momentum has diminished and this, coupled with overbought conditions, suggests that EUR / USD is unlikely to strengthen. The current move is considered part of a consolidation and the pair is likely to move sideways between 1.2050 and 1.2105 today. “

Next 1-3 weeks: “Yesterday, we highlighted that ‘a breakout of 1.2115 would not be surprising’ and that ‘the next major resistance is at 1.2185’. Subsequently, the EUR / USD advanced one pip above 1.2115 (high of 1.2116) before rapidly retreating. Short-term overbought conditions could lead to a couple of days of consolidation first. Looking ahead, the next big resistance is at 1.2185. On a short-term note, 1.2145 is already a pretty strong level. Overall, the phase positive that started about 3 weeks ago is considered intact as long as the EUR / USD does not move below 1.2020 (no change at the level of ‘strong support’) “.

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