EUR/USD faces further consolidation near term – UOB

Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group suggest EUR/USD is now likely to trade within the 1.0900-1.1050 range in the next few weeks.

Key Quotes

24-hour view: “We expected EUR to trade sideways between 1.0925 and 1.0995 last Friday. Our view of sideways trading was not wrong even though EUR traded in a narrower range than expected (1.0937/1.0993). The underlying tone has firmed somewhat and EUR is likely to edge higher today. However, a clear break above 1.1025 appears unlikely. Support is at 1.0965; a breach of 1.0945 would indicate that the current mild upward pressure has eased.”

Next 1-3 weeks: “Last Tuesday (18 Apr, spot at 1.0925), we noted that ‘downward momentum appears to be building, albeit tentatively’ and we expected EUR to trade with a downward bias. However, EUR has not been able to make any headway on the downside and last Friday (21 Apr, spot at 1.0960), we indicated that ‘unless EUR breaks clearly below 1.0925 soon, it is more likely to trade sideways instead of with a downward bias’. EUR did not break 1.0925 and downward pressure has eased. The outlook is neutral and for the time being, EUR is likely to trade sideways in a range of 1.0900/1.1050.”