EUR/USD: Downside pressure loses traction – UOB

In opinion of FX Strategists at UOB Group, EUR/USD could have now moved into a consolidative range between 1.2000 and 1.2130.

Key Quotes

24-hour view: “Our expectation for EUR to test 1.1975 was incorrect as it rebounded strongly from 1.1991 (overnight high of 1.2071). The rebound has scope to extend to 1.2090 but in view of the overbought conditions, a sustained rise above this level is unlikely (next resistance is at 1.2130). Support is at 1.2045 followed by 1.2030.”

Next 1-3 weeks: “On Wednesday (05 May, spot at 1.2015), we noted that ‘downward momentum has improved and a break of 1.1975 would suggest EUR could weaken to 1.1920’. EUR rebounded strongly yesterday and 1.1975 remains intact. While our ‘strong resistance’ level at 1.2080 is not breached (high of 1.2071), downward pressure has more or less dissipated. In other words, the pullback in EUR that started early this week (see annotations in the chart below) is not ready to move lower in a sustained manner. From here, EUR is expected to trade within a range of 1.2000/1.2130.”