EUR/USD: Upside momentum seems to have fizzled out – UOB

Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group now see EUR/USD moving into a consolidative phase in the next weeks.

Key Quotes

24-hour view: “EUR soared to a 5-month high of 1.0496 yesterday before plummeting to close at 1.0337 (-0.56%). While downward momentum has not improved much, EUR could drop to 1.0300. EUR is unlikely to test the next support level at 1.0260. On the upside, a breach of 1.0400 (minor resistance is at 1.0370) would indicate that the current downward pressure has eased.”

Next 1-3 weeks: “In our latest narrative from last Thursday (24 November, spot at 1.0400), we indicated that the rapid build-up in momentum is likely to lead to further EUR gains. We added, ‘The level to watch is at 1.0480’. Yesterday (28 Nov). EUR soared to a high of 1.0496 before dropping sharply. Upward momentum has more or less dissipated with the rapid drop. In other words, EUR is unlikely to strengthen further. For the time being, EUR is likely to trade between 1.0260 and 1.0430.”