Likely to trade in a range between 1.1640 and 1.1700 – UOB Group

Euro (EUR) is likely to trade in a range between 1.1640 and 1.1700. In the longer run, weakness in EUR from early last week has stabilized; for the time being, it is likely to consolidate between 1.1615 and 1.1730, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Weakness in EUR from early last week has stabilized

24-HOUR VIEW: “We expected EUR to ‘consolidate between 1.1615 and 1.1665’ yesterday. We were incorrect, as instead of consolidating, EUR rebounded strongly to a high of 1.1698. The sharp rebound appears to be running ahead of itself, and EUR is unlikely to rise much. Today, EUR is more likely to trade in a range, probably between 1.1640 and 1.1700.”

1-3 WEEKS VIEW: “Last Friday, EUR dropped to a low of 1.1617. Yesterday (12 Jan, spot at 1.1635), we highlighted that EUR ‘must close below 1.1615 before a move to 1.1585 can be expected’. We did not expect EUR to rise and break above our ‘strong resistance’ level at 1.1690 (high of 1.1698). The breach of the ‘strong resistance’ indicates that the decline in EUR from early last week (see annotations in the chart below) has stabilised. EUR appears to have entered a consolidation phase, and for the time being, it is likely to trade between 1.1615 and 1.1730.”