FX Strategists at UOB Group noted the pair remains poised for a continuation of the sideline pattern in the short-term horizon.
24-hour view: “The anticipated strength exceeded our expectation as EUR took out the strong 1.2370 resistance decisively (overnight high of 1.2407). While the up-move appears to be running ahead of itself, there is scope for a push above the next resistance at 1.2420. However, a sustained move above last week’s peak near 1.2445 appears unlikely. Support is at 1.2355 followed by the stronger level near 1.2315”.
Next 1-3 weeks: “While the strong 1.2420 resistance is still intact, the strong daily closing in NY is enough to indicate that the recent mild downward pressure has eased. However, there is no change to the neutral outlook but EUR has likely moved into a consolidation phase (we previously expected a test of the solid support at 1.2220). In other words, we expect EUR to trade sideways from here, likely within a broad 1.2280/1.2500 range”.
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