EUR/USD now faces some consolidation – UOB

FX Strategists at UOB Group Quek Ser Leang and Peter Chia noted EUR/USD could now navigate within the 1.0625-1.790 range.

Key Quotes

24-hour view: “The sharp drop in EUR to 1.0677 and the subsequent bounce from the low came as a surprise (we were of the view that EUR could test the major resistance at 1.0800). The movement appears to be part of consolidation and EUR is likely to trade between 1.0685 and 1.0765 for today.”

Next 1-3 weeks: “We highlighted yesterday (31 May, spot at 1.0775) that the chance for EUR to break the major resistance at 1.0800 has increased a tad. However, USD dropped sharply to 1.0677 before rebounding. The breach of our ‘strong support’ level at 1.0695 indicates that the strong phase in EUR that started early last week (see annotations in the chart below) has run its course. EUR has likely moved into a consolidation phase and could trade between 1.0625 and 1.0790. Looking ahead, EUR has to break and close above the major resistance at 1.0800 before a sustained advance is likely.”