EUR/USD now points to some consolidation – UOB

UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang suggest EUR/USD is now seen within the 1.0680-1.0880 range.

Key Quotes

24-hour view: “We expected EUR to ‘trade sideways between 1.0790 and 1.0860’ yesterday. However, EUR rose briefly to 1.0869, dropped sharply to 1.0773 and closed at 1.0788 (-0.26%). The rapid decline in EUR has scope to extend but it is unlikely to break 1.0730 (there is another support at 1.0760). Resistance is at 1.0815, followed by 1.0840.”

Next 1-3 weeks: “Two days ago (16 Jan, spot at 1.0825), we highlighted that upward momentum is easing and a break of our ‘strong support’ at 1.0760 would indicate that EUR could consolidate first before attempting to advance toward the resistance at 1.0900 later on. EUR dropped to a low of 1.0773 in NY trade and while our ‘strong support’ level was not breached, upward momentum has more or less faded. In other words, the EUR strength from a week ago has come to an end and EUR is likely to consolidate between 1.0680 and 1.0880 for the time being.”