EUR/USD upside pressure intact so far – UOB

The pair sticks to the neutral stance in the near term, while further upside pressure still remains on the cards, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “The major 1.2500 resistance indicated yesterday was untested as EUR fell sharply after touching a high of 1.2476. The sharp pullback suggests that a short-term top is in place and EUR has moved into a consolidation phase. From here, we expect EUR to trade sideways to slightly lower, likely between 1.2370 and 1.2445”.

Next 1-3 weeks: “We highlighted yesterday (26 Mar, 1.2365) that the “recent mild downward pressure has eased” and that EUR is expected ‘to trade sideways between 1.2240 and 1.2450”. However, the subsequent rapid rise that hit an overnight high of 1.2462 was unexpected. The sharp up-move has shifted the immediate pressure to the upside and for the next few days, we expect EUR to stay underpinned. That said, it is too early to expect the start of a bullish phase even though a test of the year-to-date high of 1.2555 is a distinct possibility (with strong intervening resistance at 1.2500). Overall, we expect the current upward pressure to improve further as long as the key support at 1.2340 is not taken out. On a shorter-term note, 1.2395 is already a relatively strong support”.