The negative phase in EUR/USD is expected to finish above the 1.1970 level, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “Yesterday, we highlighted that ‘upward momentum has not improved by much and EUR is unlikely to strengthen much further’ and we expected EUR to ‘trade between 1.1890 and 1.1960’. EUR subsequently rose to 1.1969 before pulling back to close slightly lower at 1.1925 (-0.11%). Momentum indicators are mostly ‘neutral’ and EUR is likely trade between 1.1890 and 1.1960 for today.”
Next 1-3 weeks: “Our update from yesterday (23 Jun, spot at 1.1940) still stands. As highlighted, the rebound in EUR has been more resilient than expected and a break of 1.1970 would indicate that the weak phase has run its course. We also indicated that EUR ‘has to move and stay below 1.1890 within these 1 to 2 days or the odds for further EUR weakness would diminish quickly’. EUR subsequently rose to 1.1969 during London hours before easing off. There is still chance, albeit a slim one for EUR to extend its weakness but unless EUR can close below 1.1890 by end of today, it appears increasingly likely that EUR has moved into a consolidation phase. In other words, the weak phase that started early last week is likely coming to an end soon.”