EUR/USD neutral, needs to clear 1.2555 for extra gains – UOB

The pair keeps the neutral bias for the time being, while it should clear the mid-1.2500s in order to sustain another leg higher, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “In line with expectation, EUR moved below last Friday’s 1.2392 low but the down-move was checked by the 1.2360 support (overnight low has been 1.2367). Despite the bounce from the low, the undertone is still weak and another attempt to move towards 1.2360 seems likely (before a more sustained recovery can be expected). Further down, the next support at 1.2320 is unlikely to come into the picture. Resistance is at 1.2435 followed by 1.2470”.

Next 1-3 weeks: “EUR edged above the January’s 1.2536 top last Friday but slumped after briefly touching a high of 1.2555. The rally from late last week appears to be running ahead of itself and we are not convinced that the up-move can be sustained. The neutral phase that started more than a week is still intact and we view the current movement as part of a broad 1.2320/1.2555 consolidation range. Looking further ahead, EUR has to ‘punch’ clearly above 1.2555 in order to suggest that it has enough momentum to continue to march higher in the coming days and weeks. At this stage, the odds for such a move are not high”.