EUR/USD neutral near term, likely between 1.1730/1.1885 – UOB

The pair’s stance remains neutral in the near term, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “We indicated yesterday that the pull-back in EUR has room to extend lower but a “sustained move below 1.1730 seems unlikely”. However, EUR only managed to touch a low of 1.1738 before staging a surprisingly strong turn-around. The short-term pressure has swung back to the upside and a test of the strong 1.1845 resistance would not be surprising (next resistance at 1.1885 is likely out of reach). Support is at 1.1775 followed by the low near 1.1740. The latter level is acting as a very strong support now”.

Next 1-3 weeks: “EUR hit a low of 1.1738 yesterday, holding above the bottom of our expected 1.1730/1.1885 consolidation range. The quick rebound from the low reinforces our current neutral view for EUR and for now, we continue to expect this pair to trade sideways between 1.1730 and 1.1885. We have been neutral for more than 2 weeks now (since 07 Aug) and the consolidation since then has eased the overbought conditions. This suggest that the risk of a ‘deeper pull-back’ has diminished even though this pair has to move clearly above the 1.0909 high seen earlier this month to indicate that it has moved back into a bullish phase”.