FX Strategists at UOB Group noted a break above 1.1970 in EUR/USD would be indicative that the negative phase has ended.
24-hour view: “We highlighted yesterday that ‘downward pressure has dissipated, and the current movement is deemed as part of a consolidation phase’ and we expected EUR to ‘trade within a 1.1875/1.1935 range’. EUR subsequently traded in a quiet manner before rising to 1.1952 during NY session. Despite the advance, upward momentum has not improved by much and EUR is unlikely to strengthen much further. For today, EUR is more likely to trade between 1.1890 and 1.1960.”
Next 1-3 weeks: “On Monday (21 Jun, spot at 1.1875), we held the view that EUR ‘is still week but oversold conditions suggest that it may take a while before the next support at 1.1800 comes into the picture’. Conditions remain oversold but the rebound in EUR the past couple of days has been resilient than expected. From here, a break of 1.1970 (no change in ‘strong resistance’ level) would indicate that the weak phase in EUR that started early last week has run its course. To look at it another way, EUR has to move and stay below 1.1890 within these 1 to 2 days or the odds for further EUR weakness would diminish quickly.”
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