EUR/USD keeps the rangebound trade unchanged near-term – UOB

UOB Group’s FX Strategists noted EUR/USD is expected to navigate within the 1.1840-1.2000 range in the next weeks.

Key Quotes

24-hour view: “We highlighted last Friday that ‘the decline in EUR could dip below 1.1900 first before stabilizing’. We added, ‘the next support at 1.1880 is unlikely to come under threat’. The subsequent weakness in EUR exceeded our expectation as EUR dropped to 1.1872 before recovering. Despite the relatively sharp decline, downward momentum has not improved by much. That said, the bias for today is for a lower EUR even though the major support at 1.1840 is unlikely to come under threat (1.1860 is already quite a strong support level). On the upside, a break of 1.1935 (minor resistance is at 1.1920) would indicate the downside risk has dissipated.”

Next 1-3 weeks: “There is not much to add to our update from last Friday (19 Mar, spot at 1.1920). As highlighted, the risk for a higher EUR has dissipated and EUR is ‘likely to trade between 1.1840 and 1.2000 for now’. Looking ahead, the risk for a breach of the bottom of the range first appears to be higher but EUR has to close below 1.1840 before a sustained decline can be expected.”