Further gains in EUR/USD appear unlikely near term – UOB

FX Strategists at UOB Group now see diminished odds for extra gains in spot in the short term.

Key Quotes

24-hour view: “The anticipated EUR strength exceeded our expectation by easily taking out the major 1.2000 resistance. However, the rapid rise to a high of 1.2069 was short-lived. The rapid decline from the top appears to be running ahead of itself and while a move below the overnight low of 1.1944 is not ruled out, any weakness is viewed as part of consolidation phase. In other words, EUR is expected to trade sideways for now, likely between 1.1925 and 1.2010”.

Next 1-3 weeks: “EUR took out the 1.2000 level in a hurry yesterday and even easily exceeded the next resistance at 1.2040 (overnight high of 1.2069). While the bullish phase that started two days ago is still intact, the weak daily closing yesterday suggests diminished odds for further EUR strength. However, confirmation of a short-term top is only upon a move back below 1.1900 (stop-loss level adjusted higher from 1.1840). Until then, another push higher to 1.2120 is not ruled out (even though 1.2070 is expected to offer stiff resistance from here). Positioning wise, the suggested entry level at 1.1910/15 was not reached and it looks like we have missed the ideal buying opportunity”.