EUR/USD LOOKS CONSOLIDATIVE FOR THE TIME BEING – UOB

Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group suggest EUR/USD could navigate within the 1.0660-1.0870 range in the next few weeks.

Key Quotes

24-hour view: “We highlighted last Friday that EUR ‘has likely entered a consolidation phase’ and we expected it to ‘trade sideways in a range of 1.0800/1.0900’. Instead of trading sideways, EUR dropped sharply to 1.0712 before rebounding quickly to end the day at 1.0759 (-0.66%). The bounce from the low could extend but any advance is viewed as part of a trading range of 1.0740/1.0830. In other words, a clear break above 1.0830 is unlikely.”

Next 1-3 weeks: “Last Friday (24 Mar, spot at 1.0835), we highlighted that ‘As long as 1.0740 is not breached, there is potential for EUR to advance further, though the next resistance at 1.0980 could be out of reach this time around’. We did not quite expect the sharp pullback that broke below 1.0740 (low has been 1.0712). The breach of the ‘strong support’ at 1.0740 indicates that the upward pressure has eased. EUR appears to have entered a consolidation phase and it is likely to trade between 1.0660 and 1.0870 for the time being.”