EUR/USD sticks to the neutral view near term – UOB

FX Strategists at UOB Group believe the chances of spot to retest 1.2200 have somewhat diminished as of late.

Key Quotes

24-hour view: “EUR only managed to touch a low of 1.2239 before swinging higher after FOMC. While overbought, the rally has scope to extend higher but the major 1.2385 level is expected to offer solid resistance. An intraday break above this level is not ruled out but a move beyond the next resistance at 1.2415 seems unlikely. On the downside, support is at 1.2315 followed by 1.2290. The 1.2239 low is not expected to come into the picture for now”.

Next 1-3 weeks: “EUR failed to move clearly below the 1.2240 support (low of 1.2237 on Tuesday and 1.2239 yesterday) and the subsequent swing higher indicates that the prospect for a test of strong 1.2200 support has diminished considerably. From here, a breach of the key 1.2385 resistance would not be surprising and would indicate that the immediate downward pressure has eased. That said, it is too soon to expect the start of a bullish phase”.