In the view of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, EUR/USD now seems to have moved into a consolidative phase.
24-hour view: Our view for EUR to continue to trade in a range yesterday was incorrect. Instead of trading in a range, EUR rebounded strongly to a high of 1.0759. Upward momentum has improved, albeit not much. Today, EUR could rebound further, but it is highly unlikely to reach the major resistance at 1.0820 (there is another resistance level at 1.0780). If EUR breaks below 1.0710 (minor support is at 1.0730), it would indicate the momentum buildup has faded.
Next 1-3 weeks: Yesterday (11 Sep, spot at 1.0705), we noted that “downward momentum has slowed”. We held the view that while EUR could continue to weaken, the likelihood of it breaking clearly below the major support at 1.0635 is low. EUR then rebounded to a high of 1.0759. While our ‘strong resistance’ level at 1.0765 has not been breached yet, downward momentum has more or less faded. In other words, the EUR weakness from early last week has stabilised. From here, EUR is likely to trade in a range, probably between 1.0690 and 1.0820.