EUR/USD bullish on a close above 1.0870/75 – UOB

EUR/USD stays neutral in the near term and could shift to bullish on a close above 1.0870/75, suggested FX Strategists at UOB Group.

Key Quotes

“The anticipated EUR strength exceeded our expectation by surging to a high of 1.0904 (easily exceeding the 1.0870/75 target). The sharp and rapid pull-back suggests that a shortterm top is imminent. That said, it is too soon to expect a sustained down-move. For today, EUR is expected to trade sideways even though the immediate bias is for a probe lower towards the bottom of the expected 1.0835/1.0900 consolidation range”.

“We highlighted yesterday that EUR has to close above 1.0870/75 to indicate that it has moved into a bullish phase. The daily closing of 1.0865 was just below this level and the condition is not met. That said, the current positive undertone is still intact and only a move back below 1.0795 would indicate that a temporary top is still in place. Until then, the risk of sustained rally could not be ruled out just yet”.