EUR/USD poised for further consolidation – UOB

FX Strategists at UOB Group see the pair within a sideline pattern for the time being.

Key Quotes

24-hour view: “We highlighted yesterday, “there is still chance EUR could attempt to break 1.1610 one more time” but added the prospect for a sustained break above the next near-by resistance at 1.1620 is not high. In line with expectation, EUR briefly touched a high of 1.1621 before easing off quickly. Upward pressure has waned and the current movement is viewed as part of a consolidation phase. In other words, we expect EUR to trade sideways for today, likely between 1.1540 and 1.1605”.

Next 1-3 weeks: “EUR tried but failed to maintain a toehold above 1.1600 for the third consecutive day yesterday (16 Oct). That said, it managed to touch a fresh 2-week high of 1.1621. We have held the same view that “a clear break above 1.1620 would shift the focus to 1.1700” since last Friday (12 Oct, spot at 1.1590). The prospect for a clear break above 1.1620 has diminished but only a move below 1.1520 (no change in ‘key support’ level) would indicate that the current upward pressure has eased. Meanwhile, further attempts to break above 1.1620 are not ruled out but time is not on the side for those looking for a higher EUR. Looking ahead, a break of the ‘key support’ would not change the current neutral outlook but suggest the start of a period of sideway consolidation”.