EUR/USD: More likely to consolidate in a 1.0870/1.0950 range – UOB Group
Further sustained rise in Euro (EUR) vs US Dollar (USD) seems unlikely; it is more likely to consolidate in a 1.0870/1.0950 range. In the longer run, technical target at 1.0945 exceeded; deeply overbought conditions suggest while further gains are possible, the potential for additional upside may be limited, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 0
Potential for additional upside may be limited
24-HOUR VIEW: "We did not anticipate the strong surge in EUR that sent it to a high of 1.0947 (we were expecting sideways trading). The advance is deeply overbought, and negative momentum divergence is tentatively forming. To put it another way, further sustained rise in EUR seems unlikely. Today, EUR is more likely to consolidate its gains and trade in a 1.0870/1.0950 range."
1-3 WEEKS VIEW: "We have expected a strong EUR since early last week. Yesterday (11 Mar, spot at 1.0835), we highlighted that 'upward momentum is showing signs of slowing, and EUR must push higher soon, or the chance of it reaching 1.0945 will decrease quickly.' EUR then soared, slightly exceeding the technical target of 1.0945 (high has been 1.0947). While the uptrend remains intact for now, it is worth noting that conditions are very deeply overbought. This suggests that while further gains are possible, the potential for additional upside may be limited. Additionally, the 1.1100 level, as a key psychological resistance, may not be easy to break. On the downside, a breach of 1.0805 (‘strong support’ level was at 1.0720 yesterday) would indicate the start of a consolidation or pullback."
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FXStreet Insights Team
FXStreet
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