EUR/USD seen sidelined in the near term – UOB

According to FX Strategists at UOB Group, EUR/USD is now expected to trade within a rangebound theme.

Key Quotes

24-hour view: “Yesterday, we held the view EUR “could test the next resistance at 1.0990 before the advance should ease off”. EUR subsequent rose to 1.0999 before dropping back quickly. Despite the pull-back, the underlying tone is still firm and EUR could retest the 1.1000 level. For today, the next resistance at 1.1025 is unlikely to come into the picture. Support is at 1.0950 but only a move back below 1.0925 would suggest the current upward pressure has eased”.

Next 1-3 weeks: “There is not much to add to the update from yesterday (03 Oct, spot at 1.0960). As highlighted, the current movement is viewed as the early stages of a consolidation phase and EUR is expected to trade sideways between 1.0890 and 1.1025. EUR subsequently rose to an overnight high of 1.0999 before easing off to end the day little changed at 1.0964 (+0.06%). The price action reinforces our view and we continue to expect EUR to trade sideways for now. Looking ahead, the top of the expected range at 1.1025 appears to be more ‘vulnerable’ and a clear break of this level would suggest the Monday’s (30 Sep) low of 1.0877 could be more significant than expected currently”.