EUR/USD: Downside pressure appears mitigated – UOB

In opinion of FX Strategists at UOB Group, EUR/USD now seems to have moved into a consolidative phase, likely between 1.1750 and 1.1860.

Key Quotes

24-hour view: “Our expectation for EUR to ‘trade within a 1.1750/1.1800 range’ yesterday was incorrect as it rose to 1.1817 before settling on a firm note at 1.1799 (+0.24%). While upward momentum has not improved by much, there is scope for EUR to test last week’s top at 1.1830. Barring a sudden surge in momentum, the next resistance at 1.1860 is not expected to be come under threat. Support is at 1.1775 followed by the now very solid level at 1.1750.”

Next 1-3 weeks: “We have held the same view since last Wednesday (21 Jul, spot at 1.1780) where EUR ‘is under mild downward pressure and could edge lower but it is too soon to expect a move to the major support at 1.1700’. After edging lower but failing to break the short-term support at 1.1750, EUR rebounded and closed on a relatively firm note yesterday (1.1799,+0.24%). While our ‘strong resistance’ level at 1.1830 is still intact (overnight high of 1.1817), the mild downward pressure has dissipated. From here, it appears that EUR has moved into a consolidation phase and it is likely to trade within a 1.1750/1.1860 range for a period of time.”