EUR/USD points to consolidation in the 1.1705/80 range – UOB

In opinion of FX Strategists at UOB Group, the pair’s stance remains neutral with the attention on the 1.1660 area.

Key Quotes

24-hour view: “In line with expectation, EUR extended its decline but failed to break below the major 1.1660 support (low of 1.1667). The rapid and sharp bounce from the low suggests that a short-term base is in place. EUR has likely moved into a consolidation phase and is expected to trade sideways from here, likely within a 1.1705/1.1780 range”.

Next 1-3 weeks: “We have held the same view that the weakness in EUR has ‘scope to extend further to 1.1660” since last Wednesday (27 Sep). This level appears to be within striking distance and from here, the odds for a sustained move below this level has increased. To put it another way, the current neutral phase would shift to bearish if NY closing is below 1.1660. If this condition is met, we would anticipate a move below the next major support at 1.1615 (for a move to 1.1500). Overall, only a move 1.1780 would indicate that the current weak phase has stabilized (key resistance was previously at 1.1820)”.