Scope for extra gains in EUR/USD appears mitigated – UOB

In light of FX Strategists at UOB Group, the likeliness of further upside in the pair has lost some momentum.

Key Quotes

24-hour view: “EUR traded between 1.1724 and 1.1797 yesterday, relatively close to our expected 1.1720/1.1795 consolidation range. Despite the relatively quiet price action, the underlying tone has weakened somewhat and the bias for today is tilted to the downside. From here, a dip below the 1.1720 support would not be surprising but at this stage, a break of the strong 1.1690 level seems unlikely. Resistance is at 1.1775 followed by 1.1800”.

Next 1-3 weeks: “We have held the same view since last Friday (21 Sep, spot at 1.1775) wherein EUR has scope to extend higher to 1.1850. The price action since then has been lackluster at best, as EUR traded within a relatively narrow range of 1.1721/1.1815. The quiet sideway consolidation has resulted in a loss in upward pressure and the odds for further EUR strength have diminished. Unless EUR can move and stay above 1.1800 within these 1 or 2 days, this risk will shift slowly to the downside and break of the 1.1690 ‘key support’ would not be surprising. In other words, time is not on the side of those looking for a higher EUR”.