EUR/USD further downside limited? – UOB

FX Strategists at UOB Group suggested that further weakness in the single currency appears somewhat limited in the next weeks.

Key Quotes

“EUR rebounded strongly without testing the major 1.0535/40 support. While downward pressure has eased with the strong recovery, it is too early to expect a sustained up-move. This pair is more likely to consolidate at these levels and trade sideways for the day, likely within a 1.0585/1.0675 range”.

“The lack of follow through despite the overall bearish indications coupled with the rather strong rebound yesterday suggests that the odds for further EUR weakness have diminished. A prolonged consolidation above 1.0540 would lead to a rapid loss in downward momentum and increase the risk of a short-term low. In the meanwhile, stop-loss is adjusted further to 1.0700 from 1.0720”.

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