EUR/USD faces some near-term consolidation – UOB
FX Strategists at UOB Group expect EUR/USD to attempt some consolidation ahead of a potential move to the 1.1240 region.
24-hour view: “EUR dipped below the bottom of our expected sideway-trading range of 1.1100/1.1190 (low of 1.1093) before soaring to an overnight high of 1.1212. Despite the strong advance, momentum is ‘overstretched’ and further strong gain is unlikely. That said, EUR could move above the overnight high but the late December peak of 1.1239 is likely out of reach. Support is at 1.1130 followed by 1.1100.”
Next 1-3 weeks: “We indicated yesterday (02 Mar, spot at 1.1040) that that ‘the rapid improvement in momentum suggests a move above 1.1096 would not be surprising and if EUR can register a NY closing above this level, it could continue to advance towards 1.1170’. The scenario was supposed to take a few days to evolve but EUR blast past 1.1096 and cracked 1.1170 with a few hours (overnight high of 1.1185). Now that 1.1170 is breached, the focus has shifted to the late December high of 1.1239. The prospect for a move to this level is not low but EUR is likely to take a breather and consolidate for a couple of days first before making a move towards 1.1239. On the downside, the ‘strong support’ level has moved higher to 1.1000 from yesterday’s level of 1.0940.”