EUR/USD neutral now, upside seen as corrective – UOB

The ongoing rebound in the pair is seen as corrective for the time being by FX Strategists at UOB Group.

Key Quotes

24-hour view: “The anticipated recovery in EUR was stronger than expected as it took out the strong 1.2320 resistance (high of 1.2336 last Friday). EUR extended its up-move early this morning to touch a high of 1.2365. The advance appears to be running ahead of itself but a retest of the 1.2365/70 resistance would not be surprising. However, the next resistance at 1.2400 is unlikely to be seriously challenged. Support is at 1.2300 but only a move back below 1.2275 would indicate that the current upward pressure has eased”.

Next 1-3 weeks: “Our recent bearish expectation (01 Mar, spot at 1.2185) was proven wrong quickly as EUR easily took out the ‘stop-loss’ at 1.2320 level last Friday (high of 1.2336). Despite the strong rebound from last week’s 1.2153 low, it is too soon to expect the start of a bullish phase. The current movement in EUR is viewed as a ‘correction’ of the decline from last month’s 1.2555 top. To put it another way, the outlook for EUR is still considered as neutral now even though the immediate bias is a probe higher towards the top of the expected 1.2220/1.2430 consolidation range”.