EUR/USD is now expected to have entered in a consolidative phase, according to Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group.
24-hour view: Our view that EUR is likely to trade in a range was incorrect. Instead of trading in a range, EUR soared to a high of 1.0616. The advance was, however, short-lived, as EUR pulled back quickly to end the day slightly higher at 1.0570 (+0.10%). We view the current movement as part of a consolidation phase. Today, we expect EUR to traded sideways in a range of 1.0530/1.0605.
Next 1-3 weeks: Last Friday (29 Sep, spot at 1.0560), we highlighted that “downward momentum has waned considerably, and the likelihood of EUR breaking below the year’s low near 1.0480 has diminished considerably as well.” EUR then rebounded to a high of 1.0616 before pulling back to close at 1.0570 (+0.10%). The price action suggests that the EUR weakness that started early last week has ended. EUR appears to have entered a consolidation phase. For the time being, EUR is likely to trade in a range, probably between 1.0495 and 1.0650.
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