EUR/USD further upside unlikely

In view of FX Strategists at UOB Group, the pair’s outlook stays neutral with extra gains unlikely for the time being.

Key Quotes

24-hour view: “EUR edged to a fresh multi-year high of 1.2555 but dropped sharply and rapidly to end not far from the low at 1.2404 (low has been 1.2392). The decline appears to have room to move below the 1.2392 low but any weakness is unlikely to be sustained (next support is at 1.2360). On the upside, resistance is at 1.2450 but only a move back above 1.2485 would indicate that the immediate downward pressure has eased”.

Next 1-3 weeks: “EUR edged above the January’s 1.2536 top last Friday but slumped after briefly touching a high of 1.2555. The rally from late last week appears to be running ahead of itself and we are not convinced that the up-move can be sustained. The neutral phase that started more than a week is still intact and we view the current movement as part of a broad 1.2320/1.2555 consolidation range. Looking further ahead, EUR has to ‘punch’ clearly above 1.2555 in order to suggest that it has enough momentum to continue to march higher in the coming days and weeks. At this stage, the odds for such a move are not high”.

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