EUR/USD keeps the consolidative phase in place – UOB

Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group suggest EUR/USD faces further range bound trading in the next weeks.

Key Quotes

24-hour view: “Our expectations for EUR to trade sideways last Friday were incorrect as it rose to 1.0685. While upward momentum has not improved much, EUR has scope to test 1.0725. The next resistance at 1.0760 is not expected to come under threat. On the downside, a breach of 1.0625 (minor support is at 1.0645) would indicate that EUR is not advancing further.”

Next 1-3 weeks: “After EUR plunged to a low of 1.0514, we highlighted last Thursday (16 Mar, spot at 1.0575) that ‘the risk of EUR dropping further has increased but it remains to be seen if can break the major support at 1.0470’. We added, ‘only a breach of the ‘strong resistance’ at 1.0680 would indicate that the downside risk has faded’. On Friday, EUR rebounded and breached our ‘strong resistance’ level at 1.0680 (high has been 1.0685). Downward pressure has eased and EUR appears to be trading in a consolidation phase, likely in a broad range between 1.0600 and 1.0800.”