EUR/USD: To trade in a choppy manner between 1.0905 and 1.0970 – UOB Group

Euro (EUR) could trade in a choppy manner between 1.0905 and 1.0970 vs US Dollar (USD). In the longer run, EUR must break and close above 1.0950 before resuming its rally, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

Chance for EUR to break clearly above 1.0950

24-HOUR VIEW: "Following the rise in EUR to 1.0929 two days, we indicated the following yesterday: 'Despite the relatively strong advance, upward momentum has not increased significantly. That said, there is no sign of an imminent pullback just yet. Today, EUR could test last week’s high, near 1.0950. Currently, it does not appear to possess enough momentum to break clearly above this level. The next major resistance at 1.1000 is unlikely to come under threat. Support is at 1.0905; a breach of 1.0885 would suggest the current upward pressure has eased.' In the London session, EUR rose to 1.0954, pulling back quickly to 1.0891. It then rebounded to close slightly higher at 1.0940 (+0.20%). The choppy price action has resulted in a mixed outlook. Today, EUR could continue to trade in a choppy manner, but the firmed underlying tone suggests a higher range of 1.0905/1.0970." 

1-3 WEEKS VIEW: "Yesterday (18 Mar, spot at 1.0920), we highlighted that the recent increase in short-term momentum 'is not sufficient to indicate that EUR is ready to resume its rally.' We added, “For that to happen, EUR 'must break and close above 1.0950.' EUR then rose to 1.0954 before closing at 1.0943 (+0.20%). The slight increase in momentum is still not enough to indicate a sustained rise. However, there is still a chance for EUR to break clearly above 1.0950 as long as it holds above 1.0855 (no change in ‘strong support’ level)."