EUR/USD: The pair enters a range trading phase – UOB Group

There has been a tentative buildup in momentum; Euro (EUR) could rise to 1.0325, potentially reaching 1.0350. In the longer run, EUR has entered a range trading phase; it is likely to trade between 1.0220 and 1.0400 for the time being, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

EUR/USD likely to trade between 1.0220 and 1.0400

24-HOUR VIEW: "Following EUR sharp rebound from 1.0176 on Monday, we indicated yesterday, when EUR was at 1.0265, that 'there is potential for EUR to rise further.' We also indicated that 'any advance is unlikely to break the strong resistance at 1.0310.' We pointed out that 'support levels are at 1.0235 and 1.0205.' The subsequent price movements were in line with our expectations, as EUR dipped to 1.0237 before rising to a high of 1.0308 in the late NY session. Upward momentum is beginning to build, albeit tentatively. Today, EUR could rise to 1.0325, potentially reaching 1.0350. Support levels are at 1.0275 and 1.0245."

1-3 WEEKS VIEW: "We revised our EUR view on Monday (13 Jan, spot at 1.0245), indicating that 'the risk for EUR has shifted to the downside, and the level to monitor is 1.0190.' After EUR dropped to 1.0176 and rebounded sharply, we indicated yesterday (14 Jan, spot at 1.0265) that 'downward momentum has slowed somewhat, but only a breach of 1.0310 (‘strong resistance’ level) would mean that the downside risk has subsided.' EUR rose to a high of 1.0308 during NY trade. While our ‘strong resistance’ level of 1.0310 has not been clearly breached yet, downward momentum has largely subsided. EUR has likely entered a range trading phase. For the time being, we expect it to trade between 1.0220 and 1.0400."