EUR/USD: Upside momentum lost traction – UOB

UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang note EUR/USD is expected to navigate within the 1.0920-1.1040 range in the next few weeks.

Key Quotes

24-hour view: “In NY trade, USD dropped sharply to a low of 1.0962. Downward momentum has improved, albeit not much. EUR is likely to edge lower from here but is unlikely to challenge the major support at 1.0915 (there is another support level at 1.0950). The downward pressure is intact as long as it stays below 1.1010 (minor resistance is at 1.0995).”

Next 1-3 weeks: “Our latest narrative was from last Thursday (27 Apr, spot at 1.1045). We highlighted that ‘despite the relatively strong advance to 1.1095 on Wednesday, upward momentum has not improved much’. We added, ‘while EUR could ratchet higher towards 1.1120, the odds for a sustained rise above this major resistance level are not high for now’. Yesterday, EUR dropped to a low of 1.0962. While our ‘strong support’ at 1.0950 has not been breached, upward momentum has more or less faded. In other words, instead of advancing, EUR is more likely to trade in a range of 1.0920/1.1040 for now.”