EUR/USD sticks to the sideline theme near term – UOB

EUR/USD remains poised to keep the angebound pattern in a 1.0715-1.0905 range in the short term, suggested FX Strategists at UOB Group.

Key Quotes

“The anticipated EUR weakness exceeded our expectation by dropping below the 1.0760 target to hit a low of 1.0738. Despite the bounce from the low, the immediate pressure is still on the downside and another push lower to test the major 1.0715 support seems likely. This is a rather strong level and is expected to offer solid support. On the upside, only a move back above 1.0800 would indicate that the immediate downward pressure has eased. Minor resistance is at 1.0780”.

“We continue to hold the view that EUR has made a short-term top at 1.0904 on Monday. The current movement is viewed as part of consolidation phase even though the immediate bias is for a probe lower towards the bottom of the expected 1.0715/1.0905 range. That said, the sharp drop yesterday has increased the risk of a deeper down-move towards the next support at 1.0655. In the next few days, any rebound is expected to face stiff resistance at 1.0830”.