EUR/USD sticks to the rangebound theme – UOB

EUR/USD remains poised to extend its current consolidative pattern for the next 1-3 weeks, suggested analysts at UOB Group.

Key Quotes

“The sudden expansion in trading range was unexpected as EUR dropped to a low of 1.1149 before rocketing to a high of 1.1238. While the rapid recovery has resulted in a positive undertone, any further EUR strength is unlikely to have enough momentum to move convincingly above last week’s peak at 1.1275/80 (1.1255 is already a strong intervening resistance)”.

“Despite the sudden burst in volatility, EUR closed largely unchanged yesterday. The neutral phase that started about 2 weeks ago is still intact and only a clear break out of the expected 1.1120/1.1290 sideway consolidation range would indicate the start of a sustained directional move”.

“Interestingly, the 207 pips range for September (between 1.1119 and 1.1326) is the second narrowest monthly range on record (record was in June 2014 with a range of 194 pips). According to a Bloomberg report, the 3Q quarterly range is the narrowest on record”.