EUR/USD likely to move within a sideline theme – UOB

FX Strategists at UOB Group sees EUR/USD moving into a consolidative phase in the short-term horizon.

Key Quotes

24-hour view: “Last Friday, we held the view “the recovery in EUR has scope to extend higher to 1.1045”. We highlighted “a sustained rise above this level is not likely (next resistance is at 1.1065)”. EUR subsequently rose to 1.1057 before ending the day on a firm note at 1.1050 (+0.26%). Upward momentum has improved and the bias is still on the upside. From here, barring a move below 1.1025 (next support is at 1.1010), EUR is likely to edge higher towards 1.1075. The next resistance at 1.1100 is unlikely to come into the picture”.

Next 1-3 weeks: “We highlighted the deteriorating downward momentum last Friday (15 Nov, spot at 1.1020) and cautioned that “the weak phase in EUR could be close to ending”. The subsequent breach of the 1.1045 ‘strong resistance’ (high of 1.1057) confirms that the weak phase that started earlier this month has run its course. The current movement is deemed as the early stages of a consolidation phase. That said, the near-term bias is tilted to the upside but any advance in EUR is viewed as part of a 1.1010/1.1115 sideway-trading range. In other words, a sustained rise above 1.1115 is not expected for today”.