Euro: Range-trading bias around recent highs against US Dollar – UOB

United Overseas Bank’s Quek Ser Leang and Lee Sue Ann report EUR/USD briefly spiked to 1.1462 after weaker United States (US) Consumer Price Index (CPI) before retreating to 1.1419. Near term, they see the Euro confined to a 1.1390–1.1455 band, with broader 1-3 weeks expectations of range-trading between 1.1390 and 1.1475. A key medium-term focus is whether the 1.1390/1.1410 support zone holds, as a break would target 1.1210.

Euro-Dollar seen locked in ranges

"24-HOUR VIEW: While we highlighted yesterday that “there is a chance for EUR to drop below 1.1360,” we indicated that “a continued drop below this level appears unlikely.” However, EUR only retested the previous day’s low of 1.1377 (low was 1.1376). During the NY session, EUR briefly spiked to a high of 1.1462, retreating quickly to close at 1.1419 (+0.33%). The brief rise did not result in any significant increase in momentum. Today, we expect EUR to trade in a range, most likely between 1.1390 and 1.1455."

"1-3 WEEKS VIEW: We have expected EUR to trade in a 1.1360/1.1450 range since last week. After EUR dropped to a low of 1.1377 two days ago, we highlighted the following yesterday (14 Jul, spot at 1.1385): “The slight increase in downward momentum is insufficient to indicate a sustained decline. EUR must close below 1.1360 before a move to 1.1325 can be expected. The likelihood of EUR closing below 1.1360 will remain intact as long as EUR holds below 1.1445.” EUR subsequently broke above 1.1445 as it briefly rose to 1.1462. The mild downward momentum has eased, and EUR has likely reverted into a range-trading phase, most likely between 1.1390 and 1.1475."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)