EUR/USD points to extra consolidation – UOB

In opinion of FX Strategists at UOB Group, EUR/USD remains poised to extend the 1.1770-1.1895 range for the time being.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the rapid rebound appears to be running ahead of itself and EUR is unlikely to strengthen much further’ and we expected EUR to ‘trade sideways between 1.1800 and 1.1870’. Our view was not wrong even though EUR traded within a narrower range than expected (1.1794/1.1850). The underlying tone has weakened somewhat and there is room for EUR to edge lower but a break of the major support at 1.1770 is unlikely (minor support is at 1.1790). Resistance is at 1.1830 followed by 1.1855.”

Next 1-3 weeks: “Our update from yesterday (15 Jul, spot at 1.1835) still stands. As highlighted, EUR is not ready to head lower just yet. From here, EUR is likely trade between 1.1770 and 1.1895 for a period of time. Looking ahead, a daily closing below 1.1770 would suggest that EUR is ready to head towards 1.1700. The prospect for EUR to move to 1.1700 is not high for now but it would remain intact as long as EUR does not move above 1.1895.”