FX Strategists at UOB Group noted EUR/USD now moved into a consolidative phase, likely between 1.1555 and 1.1670 in the next weeks.

Key Quotes

24-hour view: “Our view for EUR to ‘trade sideways’ yesterday was incorrect as it plummeted to 1.1589 before closing on a soft note at 1.1606 (-0.35%). Despite the decline, downward momentum has not improved by all that much. That said, EUR could dip to 1.1580 first before a rebound can be expected. For today, the major support at 1.1555 is not expected to come into the picture. Resistance is at 1.1630 followed by 1.1645.”

Next 1-3 weeks: “We have expected a higher EUR for more than a week now. After rising to a high of 1.1669, EUR struggled to extend its gains. Last Friday (22 Oct, spot at 1.1625), we highlighted that upward momentum has eased and a break of the ‘strong support’ at 1.1590 would indicate that 1.1680 is out of reach this time round. EUR dropped to 1.1589 yesterday (25 Oct) and despite the slight breach of the ‘strong support’, upward momentum has more or less dissipated. In other words, EUR strength has run its course. EUR has likely moved into a consolidation phase and is expected to trade between 1.1555 and 1.5670 for now.”

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