EUR/USD now faces some consolidation – UOB

FX Strategists at UOB Gorup have turned neutral on the pair and now see it attempting a consolidative theme in the near term.

Key Quotes

24-hour view: “The anticipated EUR weakness exceeded our expectation by moving below the strong 1.2380 support (overnight low of 1.2361). The weak daily closing suggests further downward pressure and the major 1.2335 support could be tested today (next support is at 1.2300). Resistance is at 1.2410 followed by 1.2440. The 1.2475 high registered yesterday expected to remain unthreatened for now”.

Next 1-3 weeks: “We highlighted yesterday that “a break of 1.2380 would serve as a pre-indication that a top is in place”. EUR took out this level without much difficulty as it plummeted to an overnight low of 1.2361. The subsequent weak daily closing in NY is enough to indicate that the bullish phase that started more than 3 weeks ago (15 Jan, spot at 1.2195) has ended. The current movement is viewed as the start of a correction phase and the pull-back in EUR has room to extend lower towards 1.2300. The high of 1.2475 registered yesterday is expected to be strong enough to cap any short-term EUR strength, at least for the next one week or so”.