Euro: Range trading consolidation persists against US Dollar – UOB

United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann report EUR/USD remains stuck in a tight consolidation, with intraday trade expected between 1.1210 and 1.1250 as momentum indicators stay flat. Over the next one to three weeks they see a narrower 1.1170–1.1270 band containing price action. Their medium-term view is that the early-September decline may have bottomed near 1.1112, allowing a corrective recovery above the 21-day EMA at 1.1280.

Euro confined to narrowing ranges

"24-HOUR VIEW: EUR rose briefly to a high of 1.1260 on Tuesday and then pulled back. Yesterday, we pointed out that “the brief advance did not lead to any increase in upward momentum,” and we expected EUR “to trade in a range between 1.1205 and 1.1255.” EUR subsequently traded within a narrower range than expected (1.1211/1.1240), closing largely unchanged at 1.1232 (-0.04%). Momentum indicators are mostly flat and today, we expect EUR to range-trade between 1.1210 and 1.1250."

"1-3 WEEKS VIEW: In our most recent narrative from last Friday (16 Oct, spot at 1.1215), we indicated that EUR “has likely entered a range-trading phase, and for the time being, it is likely to trade between 1.1160 and 1.1280.” The price movements since then still appear to be part of a rangetrading phase, but a narrower 1.1170/1.1270 range is likely sufficient to contain EUR for now."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)