EUR/USD still seen within a consolidative theme – UOB

FX Strategists at UOB Group still remain neutral on EUR/USD, expecting it to trade sidelined in the near term.

24-hour view: “The sudden and sharp decline in EUR was unexpected and came as a surprise. The drop appears to be running ahead of itself but with no sign of stabilizing just yet, EUR could weaken further to 1.0970. For today, last week’s low near 1.0925 is unlikely to come into the picture (there is another support at 1.0950). On the upside, only a move above 1.1050 would indicate that the current weakness has stabilized (minor resistance is at 1.1035)”.

Next 1-3 weeks: “The rapid retreat in EUR yesterday after testing the minor resistance at 1.1110 last Friday (high of 1.1109) was not exactly expected. However, it is too soon to expect the start of a sustained decline. For now, we are holding on to our view from Friday (13 Sep, spot at 1.1055) wherein EUR “is likely to trade sideways within a broad 1.0925/1.1130 range”. Looking forward, EUR has to register a NY close out of the expected range before a more sustained directional price action can be expected. Meanwhile, it could continue to trade between the two levels for a while more”.