Euro (EUR) is likely to trade sideways between 1.0800 and 1.0880 vs US Dollar (USD). In the longer run, EUR must push higher soon, or the chance of it reaching 1.0945 will decrease quickly, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Below 1.0720, rally can take a breather
24-HOUR VIEW: “After EUR rose to a high of 1.0888 last Friday, we indicated yesterday that ‘Despite the rise, there has been no clear increase in upward momentum.’ We indicated that ‘instead of continuing to rise, EUR is more likely to trade sideways between 1.0800 and 1.0890.’ EUR subsequently traded in a narrower range than expected (1.0804/1.0874), closing unchanged at 1.0832. There has been no increase in either upward or downward momentum, and we continue to expect EUR to trade sideways today, most likely between 1.0800 and 1.0880.”
1-3 WEEKS VIEW: “We shifted our view to positive early last week. Tracking the subsequent sharp rally, we indicated last Friday (07 Mar, spot at 1.0790) that “while the uptrend remains intact, at this stage, it is unclear for now if EUR can reach 1.0945.” We continue to hold the same view, but upward momentum is showing signs of slowing, and EUR must push higher soon, or the chance of it reaching 1.0945 will decrease quickly. On the downside, a breach of 1.0720 (‘strong support’ level previously at 1.0690) would suggest that the sharp rally is ready to take a breather.”
