FX Strategists at UOB Group now see EUR/USD moving into a consolidative phase, likely between 1.2080 and 1.2225 in the next weeks.
24-hour view: “Our expectation for EUR to ‘dip below 1.2075’ was wrong as it rebounded to 1.2173 before closing on a firm note at 1.2162 (+0.48%). Upward momentum has improved, albeit not by much. The rebound has scope to extend to 1.2195 but is unlikely to threaten the next resistance at 1.2225. Support is at 1.2135 followed by 1.2115.”
Next 1-3 weeks: “We have held a negative view in EUR since early last week. As EUR struggled to extend its decline, we highlighted on Wednesday (20 Jan, spot ta 1.2130) that EUR ‘has to move and stay below 1.2080 within these 1 to 2 days or odds for a move lower to 1.2010 would diminish quickly’. While EUR subsequently dropped to 1.2075, it rebounded strongly yesterday and edged above our ‘strong resistance’ level of 1.2170 (high of 1.2173). The price actions suggest that the weak phase that started earlier last week has ended. The current movement is viewed as the early stages of a consolidation phase and EUR is expected to trade between 1.2080 and 1.2250 for a period of time.”