EUR/USD is seen side-lined around 1.0870-1.1080 – UOB

FX Strategists at UOB Group noted EUR/USD is now expected to navigate within the 1.0870-1.1080 range in the next weeks.

Key Quotes

24-hour view: “Last Friday, we expected EUR to ‘drift lower’ but we were of the view that “any weakness is expected to face solid support at 1.0935”. The anticipated weakness exceeded our expectations as EUR cracked 1.0935 and dropped to a low of 1.0900. While downward momentum has not improved by much, there is scope for EUR to test the major support at 1.0870 before a recovery is likely. For today, a sustained decline below 1.0870 is unlikely. Resistance is at 1.0950 followed by 1.0980.”

Next 1-3 weeks: “In our latest narrative from last Thursday (10 Mar, spot at 1.1055), we highlighted that the recent multi-week weak phase in EUR has come to an end and we expected EUR to trade in a volatile manner between 1.0870 and 1.1180. While EUR dropped to a low of 1.0900 last Friday, the decline appears to lack momentum. From here, we expect EUR to trade sideways but as volatility has eased somewhat, a 1.0870/1.1080 range is likely enough to contain the price actions in EUR, at least within these few days. Looking ahead, if EUR closes below 1.0870, it would likely revisit the major support at 1.0805.”