EUR/USD now moved into a consolidative phase – UOB

In opinion of FX Strategists at UOB Group, EUR/USD is now likely to trade within the 1.2095-1.2245 range.

Key Quotes

24-hour view: “While our view that EUR ‘could break 1.2240 but is unlikely to challenge the next major resistance at 1.2290’ was correct (EUR rose to 1.2244), we did not anticipate the sharp sell-off during NY session that sent it plummeting to 1.2158. The sharp and swift decline appears overdone but has room to test 1.2145. For today, the next major support at 1.2095 is not expected to come into the picture. Resistance is at 1.2195 followed by 1.2225.”

Next 1-3 weeks: “We highlighted yesterday that EUR is still strong and that ‘the next level to focus on above 1.2240 is at 1.2290’. EUR subsequently breached the 1.2240 level (high of 1.2244) but it staged a surprisingly swift and sharp sell-off during NY session (low of 1.2158). While our ‘strong support’ level at 1.2145 is still intact, the rapid loss in momentum suggests that the EUR strength that started earlier this week has ended sooner than expected. The current movement is viewed as the early stages of a consolidation phase and EUR is likely to trade within a 1.2095/1.2245 range for now.”