EUR/USD: Expected to consolidate between 1.1305 and 1.1375 – UOB Group

Euro (EUR) is expected to consolidate between 1.1305 and 1.1375 against US Dollar (USD). In the longer run, upward momentum has mostly dissipated; EUR is likely to trade in a 1.1255/1.1420 range for now, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Upward momentum has mostly dissipated

24-HOUR VIEW: "EUR rose to 1.1418 on Monday and then eased off. Yesterday, Tuesday, we highlighted the following: 'Although upward momentum is slowing, there is scope for EUR to edge higher today. However, any advance is likely part of a 1.1360/1.1420 range.' Our view was incorrect, as after rising to 1.1407, EUR fell and tested the strong support level at 1.1320 (low of 1.1321). Despite declining, EUR has not gained much momentum. Today, we expect EUR to consolidate, likely between 1.1305 and 1.1375."

1-3 WEEKS VIEW: "We turned positive in EUR about a week ago. Yesterday (27 May), when EUR was at 1.1390, we indicated that 'A decisive break above 1.1435 could push EUR to 1.1475, with potential for further gains.' We also indicated that 'Conversely, should EUR break below 1.1320 (‘strong support’ level), it would mean that the EUR strength has come to an end.' We did expect EUR to drop and test the ‘strong support’ level as it reached a low of 1.1321. Although the ‘strong support’ has not been clearly breached yet, upward momentum has mostly dissipated. From here, we expect EUR to trade in a range, most likely between 1.1255 and 1.1420. Looking ahead, as long as there is no clear break below 1.1255, EUR could see another push higher later on."