EUR/USD could face some consolidation near term – UOB

In the opinion of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, EUR/USD could move into a consolidative phase in the near term.

Key Quotes

24-hour view: “EUR rose to a 7-week high of 1.0929 yesterday before pulling back sharply to close lower by 0.23% (1.0830). The sharp pullback amid overbought conditions and waning momentum suggests EUR has likely entered a consolidation phase. Today, EUR is likely to trade sideways a range of 1.0800/1.0900.”

Next 1-3 weeks: “Our most recent narrative was from Wednesday (22 Mar, spot at 1.0770) wherein we highlighted that ‘upward momentum is beginning to improve but EUR has to break and stay above 1.0800 before a sustained rise is likely’. EUR easily surpassed 1.0800 and yesterday, it rose to 1.0929 before closing lower for the first time in five days (1.0830, -0.23%). Short-term conditions are severely overbought and this could lead to a few days of consolidation first. As long as 1.0740 is not breached, there is potential for EUR to advance further, though the next resistance at 1.0980 could be out of reach this time around.”