The pair’s upside momentum could see another visit of the 1.2400 area, suggested FX Strategists at UOB Group.
24-hour view: “We highlighted last Friday that a “retest of the 1.2300 low would not be surprising” but this could be followed by a rebound to 1.2360. EUR touched a low of 1.2305 before staging a mild recovery that hit a high of 1.2344 during NY hours. Upward pressure has eased and while a move to 1.2360 is not ruled out, any advance is unlikely to be sustained and is viewed as part of a 1.2300/1.2360 consolidation range”.
Next 1-3 weeks: “EUR traded in a relatively narrow 1.2305/1.2346 range last Friday before ending the day little changed. We continue to see chance for a move higher towards 1.2400 even though lackluster upward momentum suggests that a sustained break above this level is unlikely (there is another strong resistance at 1.2425). On the downside, only a move below 1.2280 would indicate that the current mild upward bias has eased. Looking further out and from a longer-term perspective, the current neutral phase that started early last month is clearly intact. Note that current level of 1.2330 is almost the same as on 05 Mar, the day we adopted a neutral stance. At this stage, there is no indication that EUR is ready to embark on a sustained directional move anytime soon”.
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