EUR/USD faces further consolidation near term – UOB

UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia suggest EUR/USD could extend the consolidative mood unless it convincingly breaches the 1.0925 level.

Key Quotes

24-hour view: “Our expectations for EUR to edge lower did not materialize as it dropped briefly to 1.0931 in early NY trade, rebounded to 1.0989 and then traded sideways for the rest of the session. The price movements appear to be part of a consolidation and EUR is likely to trade sideways today, expected to be between 1.0925 and 1.0995.”

Next 1-3 weeks: “On Tuesday (18 Apr, spot at 1.0925), we noted that ‘downward momentum appears to be building, albeit tentatively’. We expected EUR to trade with a downward bias but we were of the view that any decline is expected to face solid support at 1.0830. EUR has not been able to make any headway on the downside and the build-up in momentum is beginning to fade. In order to rejuvenate the flagging momentum, EUR has to break clearly below 1.0925 in the next 1 or 2 days or it is more likely to trade sideways instead of with a downward bias. Conversely, a breach of 1.1025 (no change in ‘strong resistance’ level) would also indicate that EUR is likely to trade sideways.”