Further EUR/USD strength unlikely – UOB

The likeliness of extra gains in the pair seems to have run out of momentum in the near term, according to FX Strategists at UOB Group.

Key Quotes

“Expectation for sideway trading was wrong as EUR dropped sharply after hitting a high of 1.1023 earlier yesterday morning. The decline appears to be running ahead of itself and while a test of 1.0900 would not be surprising, a move below last week’s low near 1.0870 seems unlikely”.

“Despite breaking above the major 1.1000 resistance (high of 1.1023 early yesterday), EUR closed lower and registered a ‘bearish outside bar’. The development came as a surprise and does not bode well for the current bullish view (that started on 26 Apr, spot at 1.0930). A break below 1.0900 would indicate that a short-term top is in place at 1.1023. Until then, another push higher is not ruled out even though the odds for such a move have diminished (1.1020/25 is expected to offer solid resistance from here)”.