EUR/USD faces some near-term consolidation – UOB

According to FX Strategists at UOB Group, EUR/USD could attempt some consolidation ahead of a probable move to 1.1680.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the bias is on the upside but EUR is unlikely to break the major resistance at 1.1640’. While our view for a higher EUR was correct, we did not anticipate the strong advance that sent EUR to a high of 1.1669. The rapid pullback from the high coupled with overbought conditions indicates that EUR is unlikely to strengthen further. For today, EUR is more likely to trade sideways between 1.1605 and 1.1655.”

Next 1-3 weeks: “We have held the same view since last Thursday (14 Oct, spot at 1.1595) where EUR ‘is likely trade with an upward bias towards 1.1640’. Our view was correct as EUR easily took out 1.1640 as it rose to 1.1669 yesterday (19 Oct). Upward momentum has improved, albeit not by all that much. From here, overbought shorter-term conditions could lead to 1 to 2 days of consolidation first but as long as 1.1570 (‘strong support’ level previously at 1.1540) is not breached; EUR is likely to head to the next major resistance at 1.1680 later on. Looking ahead, the next resistance above 1.1680 is at 1.1710.”